Esmeraldas refinery shuts down following Monday fire; Government considering ending the diesel subsidy; Ecuador’s fish soup makes world top 10 list

The Esmeraldas refinery will be out of operation for more than a month, the Energy Ministry said Thursday. Energy Minister Inés Manzano said repairs are already underway following Monday’s fire, adding she did not know when operations at the facility would resume. “We have gone to emergency status, which allows us to make the repairs a national priority,” she said.

The subsidy for diesel fuel could soon be eliminated or phased out.

The ministry first reported that damage was limited, but Manzano said Thursday a full analysis revealed more extensive damage. According to inspectors, fire started at a ruptured fuel tank and then spread to two other tanks and an electrical substation.

At the time of the fire, the refinery was operating at 50% capacity as a result of damage sustained from an April 26 earthquake.

During the refinery closure, Manzano said some fuel for domestic use will be imported. “Our inventories will take us to the end of June but beyond that we will need to bring in more fuel.”

Government considers ending diesel subsidy
Although it has made no announcement, the government could begin phasing out the diesel fuel subsidy later this year. “This is under review and I believe a plan will be made public very soon,” said Larry Yumibanda, president of the Circle of Economists of Guayaquil. “The subsidy costs the national budget more than $1.5 billion a year, money that is desperately needed for other purposes.”

Although gasoline subsidies have been phased out since 2021, the subsidy for diesel has remained in place due to its use in the transportation and productive sectors, says Yumibanda. “The original idea was to keep bus fare and the cost of delivering agriculture products low, but today private businesses and private vehicle owners who can afford to pay market price are taking advantage of it,” he says.

Because of the subsidy, he says sales of diesel-powered pick-up trucks has risen nearly 50% since 2022. “These trucks cost $70,000 and $80,000 and even more,” he says. “People who can afford to pay that much don’t need a subsidy.”

Yumibanda says he expects targeted subsidies to be applied to bus owners and truck delivery services that deliver essential goods. “Final details of have not been determined but some subsidies will continue to apply although these too, will eventually be phased out.”

Ecuador’s fish soup makes top 10 list
The international food review website Taste Atlas has listed Ecuador’s encebollado ninth among the world’s top 10 best soups. A combination of fish, cassava, onion and cilantro, food historians say various versions of encebollado date back thousands of years to the coastal Valdivia culture.

Among Latin American soups, only the Peruvian shrimp chupe ranked higher than encebollado, coming in at number four in the Taste Atlas survey. Other top 50 soups were the Mexican “broth of the seven seas” and shrimp broth, ranked 13th and 17th respectively.