The Government of Ecuador announces an increase in gasoline prices: Impact on the economy and society?

The government of Ecuador recently announced that at the end of June, an almost 11% increase in the price of gasoline will come into effect, a measure that has generated concern and debate in the country. The Deputy Minister of Economy, Ana Cristina Avilés, explained that this increase will affect the two varieties of 85 octane gasoline, with a 26-cent increase per gallon, bringing the price to 2.72 dollars per gallon, or 0.71 dollars per liter. This announcement has raised concerns in a country where the issue of fuel prices has historically been sensitive. Let's remember that in the past, attempts to remove fuel subsidies have triggered strong protests led by the indigenous movement, which has played a crucial role in Ecuadorian politics and society. The measure, expected to take effect at the end of June, will be accompanied by a compensation mechanism for sectors such as transportation, as well as a band that will regulate price fluctuations in relation to the international price of oil. This decision is part of efforts to reduce fuel subsidies, a policy that has been subject to criticism and tensions in the country. It is important to note that Ecuador has allocated a significant amount of resources to fuel subsidies in recent years, sparking a debate on the sustainability of this practice. According to figures from the Central Bank, in 2023 fuel subsidies represented a considerable sum, even surpassing budgets allocated to sectors such as health or social protection. The government has argued that the elimination of subsidies is necessary to ensure efficiency and equity in the fuel price system. Deputy Minister Avilés has pointed out that the price of gasoline in Ecuador is below the regional average, and the measure aims to correct this disparity and reduce the economic burden that subsidies represent for the state. However, this decision has not been without criticism and opposition from various sectors of Ecuadorian society. Social organizations have expressed their rejection of the fuel price increase, arguing that it is a response to external pressures, such as alleged conditions imposed by the International Monetary Fund (IMF) under a recent financing agreement. The society's reaction to this increase in fuel prices has been varied, with voices warning of possible negative repercussions on the economy and the well-being of the population. The president of Conaie, Leonidas Iza, has indicated that this increase could trigger a "popular reaction," reflecting the sensitivity and importance of this issue in the country's political agenda. In this context, it is essential to closely monitor the evolution of this measure and its effects on Ecuadorian society. The discussion regarding fuel prices and subsidies remains a crucial issue in the country, with implications not only economic but also social and political. How the government manages this situation and responds to the concerns of the citizens will be crucial in the near future.