Ecuador Revamps Subsidy Strategy to Boost Social Welfare
Ecuador's government announces the removal of the diesel subsidy, reallocating the funds to social programs. The subsidy, deemed a financial burden, will cease, raising diesel prices temporarily. Compensation is planned for transport sectors, ensuring fares remain stable. Additional social benefits and tax refunds are part of the restructured plan.
The Ecuadorian government confirmed on Friday the termination of its longstanding diesel subsidy, redirecting resources to enhance social programs across the nation.
Previously deemed a $1.1 billion fiscal burden, the subsidy is being phased out under President Daniel Noboa's decree. Starting Saturday, diesel prices will climb to $2.80 per gallon until December 11. To buffer consumers against international price volatility, a price stabilization mechanism will be introduced.
While past subsidy reductions have sparked public unrest, government assurances have been made that passenger transport fares will not increase, backed by $220 million in direct sector assistance. Additionally, commercial transport is set to receive three months of compensation, while expanded social benefits, expedited tax refunds, and support for small producers form part of the government's comprehensive strategy.
Google News