The government of Ecuador has announced a 10.8% increase in the price of gasoline, effective at the end of June. This decision is expected to cause controversy, as past price hikes have led to protests from the influential indigenous movement in the country. The Deputy Minister of Economy, Ana Cristina Aviles, stated that both types of 85 octane gasoline will see an increase of 26 cents per gallon, bringing the price to $2.72 per gallon.
The measure is set to be implemented in the last days of June, according to Transportation head Roberto Luque. There will be a compensation mechanism for sectors like transportation, as well as a price band limiting fluctuations to 5% above or 10% below the international price of oil. Previous attempts to remove fuel subsidies have led to violent protests in Ecuador, making this a sensitive issue for the government.
President Lenin Moreno and President Guillermo Lasso both faced resistance when attempting to eliminate fuel subsidies. The current administration, under President Daniel Noboa, will continue to provide subsidies for diesel and gas used domestically. The IMF recently approved a new credit of $4 billion for Ecuador, but the government denies that the fuel price increase is a condition of this loan.
Ecuador has spent billions of dollars on fuel subsidies in the past few years
