Cuenca job market expects big boost following elimination of 100% tax on gas stoves

Oct 2, 2018

Two Cuenca appliance manufacturers are hiring hundreds of new employees to meet the demand for gas cooking ranges. The demand is the result of the elimination of a 100 percent special consumption tax (ICE) ordered in 2014 by the government of former president Rafael Correa.

Indurama production line in Cuenca

The elimination of the tax was part of the economic revitalization law passed in August by the National Assembly.

Cuenca-based Indurama and Fibroacero have announced plans to increase production of gas stoves and both say they need hundreds of new employees. Indurama says it will hire 600 by the end of the year and may need more in 2019.

“Gas is the preferred means of cooking for Ecuadorians so it is no surprise that stores are asking for more units,” said Jorge Ruiz, sales manager at Indurama. “The 100 percent tax by the old government was grossly unfair and required us to lay off hundreds of workers. We are happy that we are now hiring many of them back.”

He added that, following the imposition of the 2014 tax, production of gas units dropped by more than 80 percent at Indurama.

According to Correa, the ICE tax was necessary to encourage consumers to purchase electric induction stoves. With the addition of eight new hydro electric plants in the country, he argued, energy consumers should switch from gas to electric which would also reduce the need for LP gas. Gas continues to be subsided by the government, currently costing less than 30 percent of the international market rate.

Despite a variety of government incentives, sales of induction stoves never caught on with the with the public, according the energy ministry.

A spot check of prices of gas stoves in several Cuenca stores shows steep prices drops. A four-burner Indurama range at España that sold for $675 last year is now $395 while a high-end six-burner unit that was $1,200 is now $750.

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