Colombia’s President Juan Manuel Santos has predicted royalties of $5.2 billion for 2012, as the new system of oil and mining royalties takes effect.
The head of state said “This [money] is going to be distributed among the 1,089 municipalities in all the departments of the country,” including the capital district and added this demonstrates that “the jam is being spread across the toast,” in a speech published on the presidential website.
Finance Minister Juan Carlos Echeverry said in December he expected $4.5 billion to be raised in royalties in 2012.
President Santos said that $277 million would be made available to oil-producing departments, allowing them to finance part of their education and health budgets with royalties.
The law, which was approved by lawmakers in June 2011, went into effect on January 1 this year, with a three month deadline for Congress to adjust it to Colombia’s constitutional framework.
It was formulated with the aim of distributing the royalties from the oil and mining industries more fairly. They had previously been concentrated in the departments that produce the primary resources.
The law also allows the government to save up to 30% of the royalties with the aim of insulating the country from major price fluctuations.