Colombia's government is creating an oil price stabilization fund (FEPC) that will be used to cushion domestic oil prices from unexpected rises on international markets, government news agency SNE reported.

Congress has approved the fund, which is included in the national development plan and must go to the president for final authorization. The finance ministry would administer the fund, which would receive financing from the existing oil stabilization fund (FAEP) owned by state oil company Ecopetrol.

FAEP is due to transfer US$1.6bn of the US$1.9bn it has to the state by 2010. Ninety percent of the transfer will go to finance external debt payments but 10% will be used to fund FEPC, SNE said. Visit BNamericas to access our real-time news reports, 10-year archive, Fact File company database, and latest research reports. Click here for a Free two week trial to our Latin America Oil & Gas information service.