The country’s roads are getting full of cars. On the one hand, it is positive, as citizens go out to eat or work more, which boosts business and drives economic recovery. On the other hand, it shows the Ecuadorians special interest in acquiring a vehicle, a good one which is a symbol of progress.
Vehicle sales broke a record last month and totaled 12,157 units, the highest number recorded in March, mainly for light and commercial vehicle sales. In part, this growth responds to the fact that automobiles are a working tool, both formal and informal.
The more vehicles on the road, the more fuel demand, mainly excess petrol and eco-fuel, as well as diesel, whose prices have been frozen since October last year. Super Petrol, which has a free price, reflects only what is happening in the world oil market, where the price is above USD 100 per barrel.
The gallon of super has risen USD 4.66 since the 12th of this month and it is predicted that the demand for this fuel will decrease, which means more petrol and more use of eco-country. And if more cars are sold, the demand for subsidized fuel will increase.
With current oil prices, the state – that is, all Ecuadorians – pays about USD 30 million per month to subsidize imported fuel, which is used to make surplus and eco-friendly gasoline. Another 85 million goes to diesel. When the government decided to freeze prices, subsidies began to be distributed among all Ecuadorians; Which is inefficient, as those resources can be used by low-income people and vulnerable groups.
PetroCuader now plans to create new fuels, with extra and more octane than Ecopais petrol, but cheaper than super petrol. The proposal is that they will be sold at market prices, which is another way to reduce subsidies.