Ecuadornews:
Yolanda Mantilla (37 years old), a professional and mother of a family, is worried and is already thinking about options so as not to affect her economy in the face of an eventual rise in the prices of super gasoline. This, after several authorities announced that the Government is analyzing a possible targeting of subsidies. She assures that twice a month she loads with $ 25 of super her car of crankshaft 1.6 c. c. Now the subsidy on that gas is 72 cents per gallon, it would mean that she should pay at least $ 16 more a month without the subsidy. She does not like the idea and is thinking about buying a bicycle and leaving for a few days by car and not others, although she knows that the streets are dangerous for cyclists. Her other option is to take a bus on certain days.
Teresa Arcentales (47 years old) spends $ 40 a month to tank her vehicle. If the subsidy is removed, you should pay about $ 13 more, she thinks he could take it.
According to the figures published by Petroecuador, the subsidy varies according to the type of fuel. The super is subsidized with $ 0.72 per gallon (before VAT), but the subsidy is higher when it comes to the extra that receives a subsidy of $ 0.88 per gallon and in the ecopais or extra with ethanol is from $ 0.99. These values represent subsidies of 26%, 40% and 43%.
The minister of Economy, Richard Martinez, spoke these days that the subsidies that would be reviewed would have to do with the fuel for vehicles of high range, reason why it is considered that the super gasoline would be affected.
However, for Alberto Acosta Burneo, editor of Análisis Semanal, it would not make sense to withdraw the subsidy only to the super, because the effect would be a large migration towards the extra and then the subsidy would become more expensive. Therefore, it considers that the subsidy of both derivatives should be eliminated.
It suggests that the one of the super one retires of immediate way and the one of extra of gradual way. For example, increase 3.7 cents per month, so that in two years it is free of subsidy. Also suggests putting a roof, so that in case of falling prices can be adjusted downward. It warns that if gasoline subsidies are eliminated, there may be a rise in the purchase of diesel vehicles, so measures should also be taken on that fuel. He considers that there is no space in this topic for political measures, but technical ones.
Pablo Zambrano, president of the Chamber of Industries and Production, agrees that the focus should be on the super and extra, that the first eliminates the subsidy and the second create quotas to avoid harming the middle class. He believes that the super could not cost less than $3 that society should enter a debate, because you cannot continue subsidizing those who do have purchasing power, and that the Government ensures that this effort of the consumer allows to go towards a fiscal balance and not continue with uncontrolled state spending.
Studies of 2010
The targeting and elimination of subsidies has been analyzed in previous governments. In the one of Rafael Correa there were studies of the Ministry Coordinator of the Production. The report at that time indicated on gasoline that “the main impact on the measure would be in households, whose total expenses would rise by 1.6%.” That “the poorest households would not be affected by not consuming these fuels and the heaviest burden would be taken by households in quintile 5 (the highest stratum),” says the September 2010 report and forestry. (I)
