Ecuador fuel prices would have exceeded $3.80 without pricing system adjustment, government says

Ecuador's government asserts that a recent adjustment to its fuel pricing mechanism successfully averted steeper price hikes for diesel and gasoline. Christian Puente, executive director of the Agency for Regulation and Control of Hydrocarbons (ARCH), stated that the modification, enacted through Executive Decree 444, technically grounds its 1.5% reduction in an effort to cushion consumers from global oil market fluctuations.

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Without this modification, diesel would have reached $3.83 per gallon and Extra and Ecopaís gasoline $3.68.

Puente explained that international energy market conditions have been turbulent due to geopolitical tensions in the Persian Gulf, potential disruptions in the Strait of Hormuz, and global crude oil trade restrictions. He noted that approximately 25% of the world's traded oil was affected, leading to significant increases in international prices.

The "band system," as described by Puente, limited the pass-through of international price increases to consumers to a maximum of 5%. The state absorbs any difference between the international price and the consumer price through subsidies. This system, in place since 2024 for diesel and specific gasoline types, caps monthly price changes at 5% to reduce volatility for consumers and businesses.

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The band system allowed limiting the transfer of the international increase to the final consumer to 5%.

However, the Super gasoline remains outside this regulated system, with its price freely determined by market conditions. Puente also highlighted recent atypical international price behavior for diesel derivatives since February 2026, with diesel prices surging up to 90% and Extra gasoline by nearly 50%, followed by a roughly 15% decrease over two months.

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The difference between the international price and the value paid by users is assumed by the State through subsidies.