Diesel and extra gasoline prices in Ecuador are still low in the region, despite the increased freeze ordered by Guillermo Lasso

Ecuador is one of the countries that despite the increase in fuels in recent months, still has low prices for diesel and gasoline in the region and in the West in general.

This Tuesday Ecuador lives a day of protests after the previous week the government of President Guillermo Lasso froze the price of diesel and the extra and eco -not the super-, thus suspending the gang system, which was also criticized by the continuous increase after the progressive elimination of subsidies.

Thus, the diesel went from $ 1.69 to $ 1.90 and the extra and eco from $ 2.50 to $ 2.55.

The freezing of these prices caused more discontent in some sectors of society that reject the elimination of subsidies, including Conaie, led by Leonidas Iza, who ask to freeze it at a lower price, although Petroecuador assures that current prices remain the same. lower per gallon (3.78 liters) compared to other countries.

They give an example that in countries like Peru ($ 2.04), Chile ($ 3.41), Colombia ($ 2.22), the cost of diesel is higher. In addition to saying that the relationship of the minimum wage with this value is also higher compared to Ecuador.

This, in a scenario in which the global average price of a gallon of diesel is $ 4.20, according to the specialized site Global Petrol Prices. This, taking into account that the sale price to the public includes different types of taxes, depending on each country.

Also according to Global Petrol Prices, countries like Peru ($ 4.29), Argentina ($ 3.67), Chile ($ 4.54), Cuba ($ 4.54), Uruguay ($ 6.09), El Salvador ($ 3.87) or Nicaragua ($ 4.43) have a higher price than the most used gasoline, equal or similar to the extra or eco in Ecuador, where it went to $ 2.55.

For him former Minister of Economy Fausto Ortiz, The decision to put those prices by the Government is based on the projection of the increase in the price of crude oil, which has already exceeded 85 dollars internationally and is expected to be high during 2022, and this would serve as a price for the long term. term, since continuing with the band system would imply continuing with uncertainty and expectation of knowing if the price continues to rise and diesel and the extra could, he believes, exceed two dollars, bringing greater political consequences.

Ortiz adds that there are political interests on the issue, because although increasing the cost of fuel has an impact, it is not that the 21 cents more than diesel now has will represent that around 20% should be transferred equal to the prices of the products that need diesel to be taken from one point to another. For this reason, it is important that the Government continue with a price control so that it does not go up at will, in addition to that the population must also see what prices have escaped to make it notice and try to use substitute products.

“We are going to see how this month ends … the impact of diesel on transport, on food and then it will have to go adjusting to the situation of the population,” says Ortiz, who affirms that if now it continues to escape through the border the fuel, there will no longer be a problem because it will not have a subsidy.

While, Galo Salcedo, petroleum expert and Ph.D. in geology from the University of Kansas, He comments that in Ecuador fuel is produced in four refineries (more than 170,000 barrels of oil per day) although a certain amount of basic gasoline is imported, which is mixed and converted into super or extra. However, diesel is imported more due to the demand of transport and other industries.

“The State owns the oil and the production of fuels. It produces, imports and sets the prices ”, considers Salcedo.

Fernando Santos, former Minister of Energy, It also highlights that it must be taken into account that around 40% of the gasoline sold is imported and in the case of diesel the percentage increases to around 80%.

“The Government took advantage of the freeze to give a little more jump to the international price. Even so, diesel is still below … gasoline is already at international prices, ”says Santos.

One of the deficiencies that this causes, according to Santos, is that the production of fuels in Ecuador has not increased for 25 years. Since when importing you have to pay from fuel, insurance, transport and local taxes. Therefore, producing it here could help lower the final cost to the public.

Carlos Salazar, president of the National Chamber of Petroleum Derivatives Distributors in Ecuador, He believes that it was better to continue with the band system because it was to make the price transparent and leave the subsidies behind. In addition to that in this modality from the private sector the opportunity to import fuel would grow and, therefore, give the option of a better quality of fuel, with less sulfur, becoming Euro 5 type.

Salazar also claims to the Government that from his sector they have still frozen the commission for 18 years of 15 cents in extra and 12 cents in diesel per gallon, which he says is distributed between marketers, transport and service stations. He also comments that the supermarket, which was liberalized, went from representing 15% to 4% of what was marketed due to the price.

Calculations from Global Petrol Prices, the latest published on October 18, indicate that the average price of gasoline around the world is $ 4.63 per gallon. “The price differences between countries are due to the various taxes and subsidies for gasoline. All countries have access to the same oil prices on international markets, but then decide to impose different taxes. As a result, the retail price of gasoline is different, ”notes the site.

The most expensive prices in the West are found in the Netherlands ($ 8.51), Norway ($ 8.40), Denmark ($ 7.95), Finland ($ 7.81) and Sweden ($ 7.77). The price in the Chinese region of Hong Kong ($ 9.92) and in the Central African Republic ($ 8.02) also stands out. (I)