Moody's Investors Service has cautioned that Colombia's fuel subsidy regime is acting as a structural ceiling on Ecopetrol's profitability, even as global oil prices remain elevated.
The rating agency estimates that if Brent crude averages US$93 per barrel this year, the deficit in the Petroleum Fund (Fepc) could widen to a range of $22 trillion or more, diverting cash that would otherwise support the company's balance sheet or shareholder returns.
Bank of America recently maintained its underperform rating on Ecopetrol, projecting a potential share price decline of up to 28% in the near term.
This assessment adds to the bearish consensus surrounding the state-owned energy giant.
Bank of America recently maintained its underperform rating on Ecopetrol, projecting a potential share price decline of up to 28% in the near term.
The bank's analysis highlights that despite a wave of operational improvements, the political imperative to keep domestic fuel prices low continues to erode the company's financial flexibility.
The tension between market-driven revenue and politically mandated pricing is a recurring theme for Colombian energy assets.