In addition to the possible increase in VAT, which could be mixed, the funds could also come from fuel for the state treasury, and this is an idea that is getting stronger after the last statements of the President of the Republic, Daniel Noboa, on the subject. In an interview last Tuesday, he spoke about the “correct” direction of fuel subsidies “so that it does not affect people, public transport, taxi drivers, heavy goods transport, but so that “the state does not bleed”. cash.”

He stated that currently the subsidies are close to 4 billion dollars, which is equivalent to the amount of the fiscal deficit. “I think that (subsidies) should be targeted and that cost should be reduced, at least by 25 percent. I think it is reasonable and it would not affect the city, but it would affect the areas and segments that can pay for it,” Noboa commented.

Daniel Noboa agrees to his proposal and proposes a ‘mixed VAT’, as well as targeted subsidies at 25%

How much does the abolition of 25% fuel subsidies mean? In the country, 22 products or fuels are subsidized for sectors such as industry, fishing, electrical and commercial, however, those that could be revised are primarily those from the automotive sector: tax on premium automotive diesel, gasoline extra automotive and extra gasoline with automotive ethanol (Eco). Subsidy values ​​vary from month to month depending on the international fuel price and local production. The only fuel released and sold according to the international price is great.

Meanwhile, extra and ecopais gasoline prices are frozen at $2.40 per gallon. At current prices, which run from Jan. 12 to Feb. 11, the subsidy for extra auto gasoline is 24 cents per gallon, 29 cents for extra auto gasoline with ethanol, and $1.18 for premium diesel.

If a 25% subsidy reduction is implemented with current values, the subsidies for these fuels would remain: 18 cents for extra gasoline, 21 cents for ecopaís and 88 cents for premium diesel.

In this way, these fuels would cost: premium gasoline $2.58 per gallon, eco-country gasoline $2.61 per gallon, and premium diesel, whose current price is $1.70 per gallon, would rise to $2.58 per gallon.

Without subsidies, this is what you would pay for diesel and extra gasoline and ecopaís in Ecuador

Here are some examples of fuel price increases with a 25% lower subsidy:

However, if this proposal to reduce subsidies by 25 percent is implemented, the Government will have to decide whether to leave the prices of extra gasoline and ecopa frozen at one new monthly value, as has been the case so far, or, on the contrary, decide that each month can there will be a variation in the price per gallon of these fuels based on the subsidy that is in effect for the next 30 days, as is currently the case with super plus gasoline, whose price varies every month because the subsidy eliminated, for the decree, is different for each period of 30 days.