Four years ago the price of super gasoline had a suggested value of $5.20 and at some gas stations it was sold for up to $5.28. Then oil prices had also exceeded $100 per barrel due to Russia’s war against Ukraine.
Now the world is once again in uncertainty due to the United States’ conflict with Iran, which has escalated crude oil prices, influencing gasoline prices.
In Ecuador, extra and extra gasoline with ethanol (ecopaís) cost this month from $2.89 to $3.024 per gallon. Diesel increased from $2,828 to $2,962 and the suggested price of super gasoline—which is released—from $3.62 to $4.57. In 2022 this gasoline no longer had a subsidy.
The prices are directly related to the conflict in the Middle East, “the previous month the increase in the price of derivatives did not occur in its true dimension and now that the problem continues, the true impact has fully entered,” comments Ivo Rosero, president of the National Chamber of Distributors of Petroleum Derivatives of Ecuador (Camddepe).
Although he adds that in the country the calculation methodology means that the price of fuel does not reflect the true international value. For example, diesel now has a subsidy of $1.60. That state subsidy allows the gallon to be sold for $2.962 and not $4.56, which would be its real cost.
Petroecuador reports that in the case of eco gasoline (extra with ethanol) it has a subsidy of $0.46. And the extra $0.39.
For this reason, “the State began to subsidize fuels in a significant way on Sunday. This represents $190 million per month to the country, if we project it is more than $2,000 million per year,” says Rosero.
This is due to the band system that governs adjusting fuel prices each month. This methodology does not allow the value to rise beyond 5% or fall up to 10% monthly, relative to WTI.
“In the last two months we have been at the top of the band and that is approximately 15 cents per gallon,” he explains while pointing out that in neighboring countries prices are higher.
- In Peru the price of regular gasoline is between $6 and $7.
- In Colombia it is $4.
Whether prices fall depends on what happens in the geopolitical environment, if a solution is reached the effect is immediate and in Ecuador when the new monthly adjustment is due, says Rosero.
And although he considers that it is difficult to predict what will happen, he thinks that the way things are going – the dialogue table broke down – in May there could be an increase again to the top of the band, that is, 5%. (YO)
