Ecuador, the second country that has the cheapest gasoline

Ecuadornews:

With a gallon that increases to $ 1.85, Ecuador would still be far from reaching the price of gasoline that averages globally $ 4.19. It would also continue to occupy the second place among the countries in the region that have the cheapest input. Only Venezuela exceeds it.

This is reflected in the GlobalPetrolPrices.com site, which constantly monitors fuel prices in more than 150 countries around the world and which, up to December 17 this year, took as a reference the cost of $ 1, 48 that still have the Ecopaís and extra gasolines from Ecuador (the ones with the highest consumption). The abysmal difference of values ​​lies in the high level of state subsidy that Ecuadorian gasoline receives; a benefit that is not replicated in the same way in countries like Colombia or Peru, where $ 2, 81 and $ 4.11 per gallon are paid. In Uruguay, that price even exceeds the global average ($ 6.42).

This price gap that separates Ecuador from other nations, explains Alberto Acosta Burneo, editor of the magazine Análisis Semanal, reveals the “lukewarm” that is still the government’s attempt to reduce the spending that the country spends per year on fuel subsidies. . “What is being reduced is $ 0.35 of $ 1.00 of subsidies per gallon of extra gasoline and Ecopais. That will allow you to save $ 400 million, but it’s barely a tenth of the budget that is being allocated to subsidy.”

The reduction of the state benefit was announced last Tuesday by the government of Lenin Moreno as one more strategy to balance its expenses and the fiscal deficit it foresees for next year. However, the measure has received the rejection of several sectors, including several opposition leaders, such as Jaime Nebot and Guillermo Lasso, who not only believe that this measure will be inefficient, but will serve the authorities as a ‘smokescreen ‘to avoid making a real adjustment in public spending.

Acosta agrees with them, but defends the idea of ​​starting to review the policy of subsidies in a time of scarcity of resources. Not as a strategy to reduce the deficit because citizens, he argues, do not have to end up paying the imbalances; but as a way to start making state spending really rational and efficient.

In the pro forma of 2019 the government plans to receive $ 7,000 million for oil revenues, of which it plans to allocate $ 4,000 million to the fuel subsidy. A figure that becomes irrational when the investment in the field of health barely reaches $ 3.2 billion.

“In no way do I believe that the subsidy should be eliminated, because there are sectors that, like domestic gas, need it; but it is necessary to focus on it, “he argued.

Other analysts add to their position, believing that maintaining the policy of subsidies will always be a problem if the international price of oil collapses, as has been happening in recent months. If the State registers less income, it will have difficulties to cover the benefit.

It is expected that the government will issue the executive decree that will put into effect the new gasoline prices, but until this happens the debate will continue to flood social networks, in addition to the concern for a possible shortage of the product.

Francisco Silva, president of the Chamber of Distributors of Petroleum Derivatives, said that after the announcement of the hike, yesterday there were certain problems of dispatch in the provinces of the center of the country. He explained that the consumer is opting to tank their vehicles before the price increase becomes effective. It is expected that until the decree comes out, the demand will go up by 20%. Therefore, they ask Petroecuador to increase the quotas they receive from 3,000,000 gallons to 3,600,000. (I)

Source: https://www.expreso.ec/economia/precio-ecuador-gasolina-americalatina-paises-NN2539186