This one Thursday, April 6, starting at 3:00 p.m., The first technical table on the subject of fuel subsidies will be held with fuel distributors. This is called by Deputy of the Ministry of Hydrocarbons iin the facilities of the branch ministry. This is how I report it Oswaldo Erazo, Executive Secretary of the Chamber of Derivatives Distributors of Ecuador.

In exchange, they were told that the Ministry of Energy and Mining is currently developing modeling proposals for methodologies for calculating prices without subsidies, for 85-octane gasoline and premium diesel, in the segment of the automotive industry. All this based on the analysis and application of the WACC index (Weighted Average Cost of Capital).

In this context, the aforementioned technical working group was convened, with the aim of providing contributions and input for the definition and implementation of a targeting system for determining prices without subsidies, in which, among other parameters, the WAAC index was considered.

According to the letter sent to the Chamber’s main bodies on March 27, the Vice Ministry noted this On June 30, 2022, the government and social organizations and the indigenous sector (Conaie, Fenocin and Feine), signed an act for peace, with the aim of establishing a dialogue and agreement for the peaceful coexistence and development of Ecuador. The idea is to respect those agreements.

Erazo explained that the current president in The Chamber of Distributors of Derivatives, Ivo Rosero and two high representatives of the union: Francisco Silva and Carlos Salazar.

For Erazo, it is positive that the Government invites those who deal with the market to such tables. He also believes that it is necessary to look for alternatives to determine the targeting mechanism. He explained that Ecuador imports large quantities of fuel, and this represents a large cost for the state treasury.

the past few days, Energy Minister Fernando Santos warned that Ecuador has a very serious problem with fuel imports. He explained that in January 2023, the cost of importing fuel was higher than selling crude oil for export. From January 2022 to January 2023, diesel consumption increased by 30%, this increased demand had to be met by diesel imports at $4 a gallon to sell here for $1.75. This increase in consumption is greater than the growth of the economy, so it is understandable that a good part of this increase in consumption is diverted to smuggling, he commented. “We have become a cheap gas station for neighboring countries,” he said.

In this sense, the minister asked those who achieved the price freeze to agree on targeting. He reminded that in 2022, 7.5 billion dollars were spent on imports.

In the meantime, Henry Llanes, oil expert who advised Fenocin During the dialogue tables in July last year, where they tried to find solutions for the possible targeting of the subsidy, he said that from the last conversations he had with Gari Espinosa, director of Fenocin, his position is that frozen prices must be maintained during the period of President Guillermo Lasso. He also said that Espinosa indicated that she would seek a dialogue with government minister, Henry Cucalón, to present the issue of disagreement due to non-compliance with the agreement.