When the government increased the price of regular gasoline two weeks ago Ecuador went from ranking sixth internationally for lowest prices to eleventh lowest.
“I hear the complaints but when you compare our gasoline prices to those charged in other countries, we are still getting a bargain,” says René Ortiz, former secretary of the Organization of Petroleum Exporting Countries (OPEC). “It’s important that people consider the price in perspective.”
Prices for Ecuador’s low-ocatane brands, Ecopais and Extra, went from $1.48 a gallon to $1.85 on December 26.
According to the Global Petrol Price Monitor, the international price for a gallon of gasoline ranges from three cents in Venezuela to $7.61 in Hong Kong. “You have to remember that prices are very low today and are trending higher,” Ortiz says. “Six months ago, the price in Hong Kong and most of Europe was above $9 a gallon.”
Where Ecuador does not rank as well, according to Global Petrol, is in its fuel octane level. Ecopais and Extra have an 85 octane rating compared to 88 for the regular brand in Argentina. The country’s high-test, Super, rates 92 compared to 96 in Peru and Argentina.
According to the Ministry of Finance, the $1.85 per gallon for Extra eliminates the fuel subsidy that applied at the $1.48 price but Ecopais, which is an ethanol, still has a subsidy of 35 cents a gallon.
In Latin America, Ecuador’s price for regular gasoline ranks second behind Venezuela. Uruguay, at $6.40 a gallon, rates highest.
A major factor in gasoline prices worldwide, says Ortiz, are taxes. “About 90 percent of countries include taxes in the price and this can boost costs by more than 50 percent,” he says. “In Ecuador, there is no tax added.”
The government plans another fuel price hike January 15 when diesel increases from the subsidized $1.05 a gallon to $2.30. Public inter- and intra-provincial buses will be exempt from the increase.
The finance ministry estimates that the reduced subsidy will save the country $800 million in 2019. The price of Super gasoline was raised from $2.10 to $2.98 a gallon in August although the government has since said the new prices will fluctuate based on market prices.