Andean Group - March 2008 (ISSN 1741-4466)

The rise in the oil prices will benefit the economy. The mining and oil minister, Galo Chiriboga, claimed in the run-up to the March Organization of Petroleum Exporting Countries meeting in Vienna that a price range of between US$90 and US$120 for crude oil "reflected market realities". Chiriboga, who has usually been a moderate since the country rejoined Opec, seems to be moving to the more radical side. He argued, along with Venezuela and Iran, that the depreciation in the value of the dollar was forcing the oil price higher. He argued that this phenomenon, and pure speculation, were driving the oil price higher, not Opec's threats to cut production.

It is worth noting that import figures show that Venezuela has replaced the US as the country's main fuel supplier. Politically Ecuador has been trying to keep its distance from President Hugo Chávez , but the trade figures show that the country is becoming dependent on Venezuela for imports of refined products.

The surge in Venezuelan exports of refined products to Ecuador is the result of trade agreements: the central bank's analysis of where the country's imports are coming from is the first statistical proof that the agreements are having an effect. Ecuador exports crude oil but imports of petrol, diesel and other refined products are the biggest single item in its import bill. Traditionally the US has been the country's biggest supplier, but in the first 11 months of 2007 US exports of diesel fell from US$628m in 2006 to US$262m. Venezuela stepped into the gap.

Reserves: The country's official reserves dropped marginally to US$3.89bn at the end of February. In mid February they hit a record of US$3.98bn.