Ecuador government confirms 5-cent fuel price cut, explains new formula

Ecuador's government has detailed a reform to its fuel price-setting system, which will see a 5-cent reduction per gallon for Extra and Ecopaís gasoline and premium diesel starting July 12. This adjustment, outlined in Executive Decree 444, introduces a new formula alongside the existing band system.

According to Vice Minister of Hydrocarbons Eduardo Racines, the reform aims to correct discrepancies between international and national fuel prices. "We are experiencing large variations in fuel prices derived from international conflicts," Racines stated during a press conference in Quito. The new mechanism is designed to ensure that decreases in international prices are also reflected at the pump in Ecuador.

The price of Extra and Ecopaís gasoline will drop from $3.31 to $3.26 per gallon, while premium diesel will decrease from $3.25 to $3.20 per gallon. However, the price of Super gasoline will not be affected, as it continues to be regulated by international market prices.

Racines emphasized that the reform is a response to the high volatility in global markets, often caused by international conflicts. The goal is to gradually reduce the difference between national and international prices when market conditions are favorable. The existing band system will remain in place and will be periodically evaluated for its continued relevance or a potential return to the ordinary pricing scheme.