The Latin American and Caribbean Energy Organization (OLACDE) released its latest Energy Inflation Report (IE-LAC), revealing that the region started the year with a negative variation of -0.11% in sector prices. This decline, which contrasts with the rise in overall inflation (0.35%), signals a trend of easing energy costs for regional consumers ahead of recent pressures in international markets.
This trend is primarily explained by the strengthening of renewable generation—particularly hydropower and solar—as well as strategic adjustments in electricity subsidies across 11 of the 20 countries analyzed. According to the report, regional energy infrastructure is not only advancing toward decarbonization but also acting as a critical buffer against external price volatility, stabilizing marginal operating costs.
Technical highlights from the report:
- Monthly variation: Energy inflation shifted from 0% in December 2025 to -0.11% in January 2026.
- Coverage: 55% of countries in the region recorded a net decrease in energy prices.
- Market contrast: While energy prices declined, sectors such as food, healthcare, and education drove overall inflation upward.
- Total inflation increased from 0.30% to 0.35%.
Main drivers:
- Increased renewable generation (hydropower and solar) → reduction in marginal costs.
- Expansion of electricity subsidies → tariff relief.
Commodities: Despite regional relief, WTI crude oil and natural gas began an upward trend starting in December 2025 due to seasonal and supply factors.
- Oil (WTI): Downward trend throughout 2025, with an upward shift since December 2025.
- Natural gas: Increase driven by seasonal demand in the Northern Hemisphere.
- Coal: Sustained growth due to higher demand and supply constraints linked to climate regulations.
For more information and access to the full report: https://www.olade.org/en/publicaciones/april-2026-report-no-23-energy-inflation-in-latin-america-and-the-caribbean-ie-lac/
