Moreno’s popularity takes a big hit following reduction of gasoline subsidy; Correa considered it but said the political cost was too high

Dec 29, 2018

A new poll shows that President Lenin Moreno suffered major political damage from his decision to raise the price of Ecopais and Extra gasoline earlier this month. The new price of $1.85 a gallon for the two low-octane brands went into effect Wednesday, up from the subsidized price of $1.48, which has been in effect for more than a decade.

Popular support for President Lenin Moreno has declined as a result of his decision to eliminate gasoline subsidies.

In a Cedatos-Gallup poll conducted after the announcement of the price increase, Moreno’s approval rating plummeted to 32.7 percent, down from 46 percent in a September poll.

Nationally, 75.2 percent of respondents oppose the elimination of the gasoline subsidy, with residents of Quito and Guayaquil rejecting it by 84.9 percent and 82.9 percent respectively.

Moreno received positive feedback on his decision to reduce the salaries of senior government officials, with 80.9 percent agreeing with him.

According to polling notes by Cedatos, the public’s rejection of the elimination of gasoline subsidies is based, in part, on fears that the LP gas subsidy is also in danger. “Respondents believe that the government is planning to eliminate all fuel subsidies, including the one for LP gas, and that gasoline is only the first to go,” pollsters said.

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The gasoline and gas subsidies were instituted in the 1970s by the military government and have changed little over the years despite threats by several governments to reduce or eliminate them.

In 2013, former president Rafael Correa said he would eliminate subsidies by the end of 2016 but did not follow up on the plan. In an early 2017 interview with a Spanish newspaper, the ex-president admitted that he backed down for political reasons. “I would have been lynched if I followed through and my party [Alianza Pais] would have been destroyed,” he said. “I still believe that the subsidies should end and a better system installed to help those who are truly in need. The subsidy is huge burden on the national economy.”

The fuel subsidies cost the government an estimated $3.8 billion in 2017, according the national comptroller’s office.

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