The government of Ecuador has decided to repeal the law ending fuel subsidies that was announced 10 days before and that sparked mass protests. The government will discuss with indigenous leaders a new law to ensure fuel subsidies are not used by fuel smugglers.
Subsidies on gasoline and diesel were introduced in the 1970s and are estimated at around US$1.4bn, burdening the budget. The government had agreed to liberalise fuel prices under a US$4.2bn deal with the International Monetary Fund (IMF). The announced removal of subsidies led to a nearly 30% increase in gasoline prices and to a 123% surge in diesel prices, prompting nationwide protests, and the declaration of the state of emergency.
Earlier in October 2019, Ecuador announced that it would leave the OPEC and planned to raise its crude oil production from around 516 kb/d in 2017 to 560 kb/d in 2019 and 590 kb/d in 2020.
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