Trucking companies set June 4 deadline for possible strike if government doesn’t agree to fuel talks

May 28, 2021 | 1 comment

The leaders of land transport federations, the unions representing trucking company owners, said Thursday they could call a nationwide strike on June 4 if the government doesn’t agree to discuss rising fuel costs.

Protesting higher diesel prices, buses, trucks and taxis called a temporary work stoppage in Cuenca in April. (El Mercurio)

The owners are demanding that the government restore fuel subsidies or allow transport companies to adjust shipping rates based on market prices for diesel fuel. Former president Lenin Moreno eliminated the national subsidy on diesel and gasoline in May 2020, allowing prices to rise to international market levels.

Owners claim the move is unfair since costs for freight delivery are fixed by the government. “We are calling on the new government to help us resolve an unworkable situation,” said Miguel Guamán, representative of the National Chamber of Urban Transporters. We are demanding the re-installation of subsidies or a policy change that allows transporters to adjust rates to accommodate increased fuel costs.”

Guamán said transporters are in disussion with other groups affected by increasing fuel costs, including municipal bus owners, taxi unions and school bus owners. “The elimination of subsidies affects thousands and thousands of owners and employees and it is crucial that we come to an understanding with the government or we will have no option but to strike.”

Gustavo  Heredia, a former consultant to trucking companies, says rising fuel costs will be one of President Guillermo Lasso’s early challenges. “If an agreement is not reached quickly we could have a nationwide strike that will paralyze the country,” he said. “If transporters are joined by other interests, such as taxi companies and municipal buses, the situation would spiral out of control.”

In the last two weeks, trucking companies have staged partial work stoppages in Guayaquil, Quito and Imbabura Provinces, blocking traffic temporarily on major highways and streets. Municipal bus owners in Guayaquil have also stopped service on popular routes and, in Cuenca, a bus strike was temporarily averted when the city agreed to pay a subsidy for discounted fares.

In April, the government averted a strike by interprovincial bus owners by agreeing to a 15 percent fare increase but the agreement did address other transportation sectors.

To date, diesel costs have risen 48 percent from August 2020 while gasoline prices have gone up 19 percent.

“There is a conflict between the decision to allow fuel costs to rise to market rates and a regime that fixes the costs of transport and passenger service fares,” Heredia says. “Something must be adjusted or there will be problems. During the campaign, the Lasso said he supported the end of subsidies so now he will have to go back on his word or agree to allow rates and fares to increase.”

Heredia conceded that higher freight transport rates and bus fares, if they are authorized by the government, could lead to conflicts with other sectors of the population. “Several indigenous and workers organizations say they will oppose increased prices and this could lead to a public uprising similar to what we saw in October 2019.”

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