Colombia Heading Into an Energy Crisis as Gas Production Falls 36% Over a Decade and a Super El Niño Threatens Hydro Output

Colombia's natural gas output has been in structural decline for years. In April 2026, the country produced 694 million cubic feet per day, according to OilPrice.com. That figure is nearly 1% lower than the prior month, 15% lower than April 2025, and 36% lower than a decade ago.

To fill the gap, Colombia began importing liquefied natural gas in December 2016. By 2025, imported LNG accounted for roughly 18% of all natural gas consumed in the country. Earlier 2026 projections pegged that share at around 25%. The actual number has already blown past 32% and is still climbing, according to OilPrice.com.

Why This Is Expensive

Imported LNG costs significantly more than domestically produced dry gas. Between 2022 and 2024, Colombian natural gas prices surged 36%. Industry analysts now estimate prices will rise by as much as 25% more during 2026 alone, according to OilPrice.com.

Natural gas is not a luxury commodity in Colombia. It heats homes, runs commercial kitchens, and powers industrial operations. When its price rises, inflation follows almost immediately.

Government statistics agency DANE reported a monthly inflation rate of 0.47% for May 2026, translating to 5.84% annualized. That is the highest reading since 2024, when inflation was still unwinding from a record 12.36% hit in 2023.

The Fiscal Trap

Colombia's government has limited room to absorb these costs. The budget deficit ended 2025 at 6.4% of GDP, near historic highs. OilPrice.com projects it will widen to 6.6% in 2026, which would rank as the third-largest fiscal deficit in the world by that measure.

A government running deficits that large has few good options. Subsidizing energy prices adds to the deficit. Letting prices rise accelerates inflation and squeezes households. Neither path is clean.

The El Niño Wildcard

Scientists are forecasting a Super El Niño event in 2026, which is expected to bring severe drought conditions to parts of South America, including Colombia, according to OilPrice.com.

Colombia relies heavily on hydroelectric power. Drought lowers reservoir levels, reduces hydro generation, and forces the grid to fall back on thermal plants. Those thermal plants run on natural gas. The same natural gas that is already in short supply and rising in price.

The concern is a self-reinforcing spiral: drought cuts hydro output, thermal demand rises, LNG imports increase, prices climb further, inflation accelerates, and the deficit widens to absorb it all.

Legitimate Counterweights

Critics of alarmist energy forecasting would point out that El Niño severity predictions are probabilistic, not guaranteed. Colombia has navigated drought-related power stress before without a full-scale crisis. The government could pursue emergency demand-side measures, accelerate renewable buildout, or negotiate emergency supply agreements. LNG market prices have also been volatile in both directions. A global supply glut, not impossible given current production trends, could ease import costs faster than the worst-case scenario assumes.

Those are legitimate concerns. The question is whether Colombia's fiscal position leaves room for error. Governments with 6.6% deficits and rising inflation cannot easily absorb an unplanned energy shock.

The Unresolved Question

What is Colombia's plan if hydro generation drops sharply during a drought? The country has no announced emergency LNG supply agreement, no disclosed strategic reserve, and a fiscal structure that makes large subsidy expenditures increasingly risky. Whether the Petro government moves proactively on supply contracts or waits for reservoir levels to tell the story will determine how badly 2026's second half unfolds.