Economy & Business - December 2021

ECUADOR: Struggling to wean the population off fuel subsidies

In late October, Ecuador’s President Guillermo Lasso suspended the progressive reductions in fuel subsidies which have been taking place monthly since July 2020, bowing to pressure from unions, the agricultural sector and, most importantly, the indigenous movement Confederación de Nacionalidades Indígenas del Ecuador (Conaie). Nonetheless, the announcement did not improve Lasso’s relationship with these groups, which are demanding that prices be frozen at lower levels and have threatened to resume protests in January 2022. Despite the government’s opposition to the subsidies, its weak political position could force it to make additional concessions on fuel prices, further complicating its effort to balance the books.

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