Fuel subsidies reached $4.56 billion in 2022, double 2021

fuel subsidies they reached $4,560 million in 2022. This is a record figure that doubles what was spent on this same item in 2021, when it was $2,214 million. While fuel subsidies represent a strong fiscal pressure, the process of targeting said subsidy – which implies the exclusion of the benefit of those who do not need it – that was agreed at the dialogue tables between indigenous people and the Government does not seem to have a clear path, Given the technological complexity and the need for changes in regulations, which generates a slow process, not agile.

Despite this, according to the Government, A pilot plan for the targeting of fuels could already be ready at gas stations in September or October 2023. This was stated by Minister of Transportation and Public Works, Darío Herrera, who also said that some progress has been made in this matter, part of the agreements of the dialogue tables last October. This, according to their statements given to ecuavisa.

Darío Herrera indicated that the issue of subsidy targeting is complex and that it will require the implementation of technological processes to be able to exclude the beneficiaries of the subsidy, as stated in the agreements. He also clarified that he has stopped leading the subsidies table and that now the coordination is in charge of the Ministry of Finance, together with other government entities, such as the National Transit Agency, the Ministry of Production, the Ministry of Public Works itself, among others. .

According to Herrera, At the moment there is a roadmap with defined times and, for example, the Regulation and Control Agency (ARC) is working with technology providers.

One of the progress in terms of subsidies would be, for example, having withdrawn the subsidy to shrimp farmers. However, it has been unofficially known that the Government could seek another type of optimization of the subsidy with a focus on the tuna sector, ethanol, vehicular LPG, among others.

Herrera clarified that the subsidy for shrimp, fishing and tuna vessels is not as high as the president of the Confederation of Indigenous Nationalities of Ecuador (Conaie) has said. Leonidas Iza had also said in ecuavisa that the State pays $1.200 million in subsidies for these three sectors and that by fixing this issue (withdrawing the subsidy) they could deliver that money to the poor. In this sense, Herrera said that in 2021 the subsidies for these sectors could have reached $200 million ($84.8 million for shrimp, $67 million for fishing boats, and $38 million for the tuna sector) and calculated that by 2022 they could have doubled due to the effects of international prices, and therefore have reached a maximum of $400 million.

Meanwhile, the Vice Minister of Government, Ana Changuín, commented that control over compliance with agreements is progressing and that the The Energy and Natural Resources Board will meet on February 9. Changuín said that at the moment the sessions of the second follow-up table that began to meet on January 17 are taking place. This table has the task of signalizing and reviewing compliance with the agreements.

The vice minister recalled that there are 218 agreements and 44 disagreements. There are 136 agreements that are of a collaborative nature, that is to say, that they must work between the Government and the social organizations. In this way, he said that seven out of eight implementation tables have met, in order to develop a road map for the 136 collaborative agreements. On the specific issue of subsidies, “there is an internal schedule and we are within the deadline to work,” he said.

The look of Herrera and Changuín does not match that of Henry Llanes, who was an advisor to the social bloc (indigenous sector) in the dialogue process on the issue of subsidies and at the table on extractive activities. When asked if there has been any kind of progress on the subject of targeting, he answers that there is no. He assures that a general evaluation and monitoring table should be created, made up of social organizations with the Government based on a work schedule, but this has not happened. Llanes comments that this week, on the side of the National Confederation of Peasant, Indigenous and Black Organizations (Fenocin), an evaluation was made of what has been fulfilled or not regarding the agreements. According to his account, the conclusion was that the only thing accomplished so far is the freezing of fuel prices.

In this way, he says that no progress has been made on the issue of establishing the targeting based on income, ownership according to the number of cars or cylinder capacity of the vehicles, as had been agreed. Llanes indicates that Petroecuador was the entity that was going to prepare the terms of reference for the implementation of computer platforms and award through a bidding process. But it also recognizes that there are obstacles to implementing targeting. One of them -he says- is that they did not agree to lower the prices of regular gasoline and diesel to $2.10 and $1.50. It also ensures that even if the pilot plan is implemented, the Government is prohibited from investing in private companies. And this would prevent them from handing over to private stations the technological platform for targeting. For this there should be a legal reform first.

“It is not a question of blowing and making bottles,” says Llanes about the implementation of targeting, also ensures that the important thing has been keep the price freeze at least until the term of President Guillermo Lasso ends.

As to table 5, that has to do with reforms to the hydrocarbons, mining, prior consultation and reform laws of the Amazon, says that there have been “zero progress”. He considers that the biggest problem is that the Government does not have the capacity for a serious, responsible and methodological political management.

For his part, Oswaldo Erazo, executive secretary of the Chamber of Distributors of Oil Derivatives (Camddepe), He comments that in a meeting they had with Minister Fernando Santos a few weeks ago, he told them that as soon as the technical tables were installed they were going to be invited. However, he says that at the moment this has not happened, so he assumes that these tables have not yet started.

Erazo points out that the minister is aware that the distributor sector is key in the targeting process. He also ensures that the implementation This is the most difficult, precisely because it is necessary to identify who should or should not be a beneficiary. The agreed model that is exclusionary raises many applicability problems, he says. They expect to be called to the technical tables soon and maintain the expectation that “After so much dialogue, there is already a firm proposal.” (YO)