Fuel subsidy plan for public transportation carriers will be announced September 27

Sep 17, 2021 | 3 comments

Following meetings with representatives of public transportation unions, the government said it has reached an understanding for providing subsidized gasoline and diesel fuel for buses and taxis and some trucking activities.

By installing subsidies for the public transportation section, including buses, the government hopes to head off protest over fuel cost increases.

“We have reached some agreements and expect to release the final details of the program by September 27,” says Transportation Minister Marcelo Cabrera. “There will be different approaches for different transit sectors, since each has its own needs and this will be spelled out in the final document.”

Cabrera added that the subsidy agreement will go beyond simply maintaining transportation fares. “By lowering taxes and fees, we are also looking at reducing operational costs that carriers must pay, including for equipment and products for maintenance, such as tires, oils and engine filters,” he said.

Felipe Vizcaíno, president of the Heavy Transport Federation that represents trucking companies, says the government has negotiated in good faith. “They want a solution as much as we do,” he says. “They see the protests about fuel costs and understand if they can keep fares and transport costs at current rates most people will be happy.”

San Francisco University-Quito economics professor Byron Iglesias agrees and says the government may be able to defuse protests over higher fuel costs by promising not to raise bus and taxi fares. “The people who use public transportation are worried that rates will increase which is their primary concern about the ending of subsidies. If they have assurances this won’t happen, they will be content,” he says. “In a sense, [President Guillermo] Lasso is buying off a large segment of the population who might otherwise join the protests. Most people are not concerned if wealthy people pay more for gasoline for their expensive cars. They are concerned about how their personal economy is affected.”

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