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LatinNews Regional Monitor: Andean Group - 2 October 2019

In brief: Ecuador to remove petrol fuel subsidies and leave Opec

* Ecuador’s President Lenín Moreno has signed a presidential decree removing all subsidies on diesel and low-octane petrol fuel, which costs the state an estimated US$1.4bn a year, as part of his government efforts to reduce government spending and balance the public accounts. Moreno has also announced plans for a tax reform that will generate an additional US$600m in revenues, and a labour reform to “facilitate the hiring of those who are seeking work”. The measures are part of attempts to reduce Ecuador’s fiscal deficit, which was a condition of the US$4.2bn loan granted by the International Monetary Fund (IMF). In a related measure the energy and non-renewable resources ministry has announced that Ecuador will formally leave the Organization of Petroleum Exporting Countries (Opec) on 1 January 2020 to help ensure fiscal sustainability in the country. Withdrawing from Opec will allow Ecuador to increase its crude oil exports, as this would no longer be bound by Opec export restrictions, and help to raise government revenues.

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