In a surprise move, the government of Ecuador has announced an 11% increase in the price of gasoline, which will take effect at the end of June. The decision has been met with protests from indigenous groups who fear it could lead to inflation and hardship for low-income families.
The Deputy Minister of Economy, Ana Cristina Aviles, revealed the news at a press conference, stating that both types of 85 octane gasoline, including an ecological version containing up to 5% ethanol, will see a price increase of 26 cents per gallon. This will raise the cost from $2.46 to $2.72 per gallon or $0.71 per liter.
Roberto Luque, the head of Transportation, stated that the measure is expected to be implemented in the last days of June. The increase will be accompanied by a compensation mechanism for sectors such as transportation and a price band to prevent fluctuations of more than 5% up or 10% down per month based on the international price of oil.
The fuel price increase has been met with opposition from various social organizations who believe it is a condition set by the International Monetary Fund (IMF), which recently approved a credit of $4 billion for Ecuador. However, the Deputy Minister emphasized that fuel subsidies are unsustainable and that the cost of fuel in Ecuador is below the regional average. The subsidy for regular gasoline alone reached $644 million in the previous year.
Some indigenous sectors have expressed concerns over the fuel price increase and suggest it may lead to a popular reaction among low-income families who rely on affordable transportation options. Despite this opposition, President Daniel Noboa aims to implement this measure as part of his efforts to reduce subsidies and ensure economic sustainability in Ecuador.
In conclusion, while this decision has sparked controversy among various stakeholders in Ecuador, it remains clear that it is necessary for achieving long-term economic stability in
