(Bloomberg) -- President Gustavo Petro said he’ll temporarily take responsibility for setting Colombia’s household utility bills, allowing him to cut electricity tariffs at a time of soaring inflation.

Petro said in a speech Thursday that he assumes “directly and personally” the control and management of residential public services “at least for a time”, citing an article of the constitution that he says grants him this power. 

Electricity prices are currently set by a regulator. 

On Friday, Petro took to Twitter to ask why, if dams are full, hydroelectric power companies are charging 900 pesos ($0.20) kilowatt per hour, up from the “usual” charge of 200 pesos. He also said that electricity tariffs have jumped 40% in the nation’s Caribbean coast, without specifying in what period. 

By cutting returns to power providers, Petro’s move “puts investment at risk” in the sector, according to Alejandro Lucio who heads Bogota-based energy consultancy Optima Consultores. 

New infrastructure is needed for a sustainable long-term reduction of tariffs, which Petro’s decision imperils, Lucio said, in reply to written questions.  

Crop damage from heavy rains, a phasing out of gasoline subsidies and a 16% minimum wage rise have meant that while inflation has slowed in Brazil, Mexico, Peru and Chile in recent months, it has continued to accelerate away from its 3% target in Colombia. 

Colombians’ energy bills are linked to inflation, and are also a key component of the consumption basket. This has created a feedback loop whereby a rise in energy costs can cause inflation to jump, which then pushes up energy bills even further. 

Unlinking energy bills to consumer price rises “is something that the government should have done a long time ago” to avoid this situation, said Jorge Restrepo, an economics professor at Javeriana University in Bogota. 

Consumer prices rose 13.1% last year, the fastest pace in nearly a quarter of a century, with further acceleration forecast in the first quarter. 

The Petro administration has been looking for ways to ease inflation which hurts poorer Colombians. Earlier this year, the government announced it was freezing diesel prices and road tolls.

--With assistance from Sunil Kesur and Oscar Medina.

©2023 Bloomberg L.P.