Ecuador freezes fuel prices after struggle with social movements

The president of Ecuador, Guillermo Lasso, announced the freezing of the price of fuels and he promised that he would enforce “without exceptions” the official prices of the basic food basket in the country, after an intense struggle with social movements over their tax and labor reforms.

“As of today, the monthly increases in fuel prices are suspended, and the price of Extra gasoline is set at US $ 2.55 and the price of diesel for public, community, school, tourism, heavy and mixed cargo transport and for the general public, at US $ 1.90 ″, he announced.

Social movements had called for a march on Tuesday 26 to demand these measures, after months in which fuels had risen by more than 40% in Ecuador under a price band system, set by his predecessor Lenin Moreno, who had de facto mitigated the loss of state income due to the historical subsidies that govern the country.

Lasso argued his decision that it is necessary to “provide stability to the pockets of Ecuadorians.”

“We have listened to you, the citizens, and also to the social and political sectors to generate agreements that lead us to a stable environment in which to grow and generate employment,” he said in a public address this Friday.

A sensitive issue in Ecuador

The price of fuel is one of the most sensitive issues in Ecuadorian society and an attempt in 2019 by Moreno to eliminate subsidies led to a wave of unrest in which at least six people died and more than 1,500 were injured.

Moreno backed down to calm the country but, a few months later, with the price of crude on the ground due to COVID-19, he established a system of fluctuation that somehow had a similar effect.

Because the price in Ecuador was subject to that of the international market and the rise in crude oil in 2021 has triggered the cost of all gasoline.

Regarding the demands to control the increase in prices of basic products that had been made to him by the indigenous movement, Lasso assured that he has ordered “the authorities of the National Government to protect the family economy.”

“I have instructed governors and mayors to enforce, without exceptions of any kind, the official prices of rice, milk, fruits, and all the products of the basic basket,” he added.

Fear of a crisis like the one in 2019

The announcement comes after several weeks of tug of war with the leadership of the Conaie indigenous movement, whose president, Leonidas Iza, had called for massive protests the next week.

The president assured today that “this government does not feel the owner of the truth.” On the contrary, we know that creating opportunities is not only our task, but everyone’s, ”he added.

And despite his latest tirades in which he warned his supporters that he was not going to allow riots like those that shook Quito two years ago, the president today has adopted a less frontal and more conciliatory tone in an apparent attempt to release pressure.

The state of social tension has been increasing in recent weeks in which there has been an unprecedented prison crisis and citizen insecurity, which has led the president to declare a state of exception to alleviate both scenarios.

In addition, since last month Lasso has seen his plan for fiscal and labor reforms blocked in the Legislature, and his popularity has declined after being known for the Pandora papers that until 2017 had properties in tax havens, which is being investigated in the Assembly National and the Prosecutor’s Office.