Ecuador: Rising fuel consumption has sparked protests in the country’s major cities

Major cities Ecuador Recorded this Tuesday Small protests blocked some roads for a while Demonstrations against rising petrol prices for higher consumption after Daniel Nobo’s government cut subsidies and uncapped consumer sales prices.

At one o’clock in the morning, Picketing by trade unions and other social organizations They cut several spots where they burned tires in cities like Quito and Guayaquil, a prelude to an uncalled for action. A rally was called for Thursday in the center of the Ecuadorian capital.

The protest was held peacefully for about 2 hours.

Among the groups that took part in the demonstrations this Tuesday were the United Workers Front (FUT), the country’s largest trade union centre; National Union of Educators (UNE); Federation of Ecuadorian University Students (FEUE); Federation of Secondary Students of Ecuador (FESE); Quito’s Confederation of Neighbors and the Marxist-Leninist Communist Party of Ecuador (PCMLE).

Cleaver Hidalgo, head of the UNE in Pichincha province (whose capital is Quito), vowed that they were taking to the streets to reject “Daniel Noboa’s neoliberal package.” “This is the second economic blow by the President” after the increase in Value Added Tax (VAT) from 12% to 15% from April.

As for Hidalgo, the president has approved the Department of Commerce and the International Monetary Fund (IMF), a $4,000 million loan program for Ecuador within 48 months.

For her part, Dayana Pasandez, head of FESE, said Noboa “forces Ecuadorian families to choose between educating their children or paying for basic services.”

Likewise, Carlos Castellanos, president of the Popular Front in Pichincha, asserted that “the rise in fuel prices has created inflation in the poorest sectors of the country.”

Since last Friday, The government cut fuel subsidies for Extra and Eco Pies gasoline, which are the most consumed in Ecuador. 85 octane bi-fuel prices were up from $2.47 per gallon (3.78 liters) to $2.72.

However, the Novoa government did not completely liberalize the prices of these two fuels as it implemented a price stabilization system so that they could not rise by more than 5% or fall by more than 10% on a monthly basis. Possible fluctuations include a sudden increase in international oil prices, which will be covered with subsidies.

A mechanism Cost compensation for carriersThe fleet of approximately 84,000 vehicles will receive an economic allocation from the state to cover these increases and prices so that it does not represent an additional cost to their passengers.

With this move, Novoa management is looking to save around $644 million. According to data from the Ministry of Economy and Finance, the cost of the subsidy, which the government describes as the most disproportionate of all, is that more than half of this money helps subsidize fuel for the high-income population of Ecuador. .

Noboa currently maintains subsidies for diesel and gas, accounting for more than half of the more than $3 billion the Ecuadorian government has spent on fuel subsidies to people by 2023.

The 36-year-old young president, who will be in power since November 2023, cut gasoline subsidies as part of economic reforms to balance the public accounts, which recorded a deficit of nearly $4,800 million in 2023, equal to 5%. % of Gross Domestic Product (GDP)

(with information from EFE)