Ecuador reforms fuel price reduction mechanism

President Daniel Noboa has again altered Ecuador's fuel pricing formula, introducing a new decree that modifies how gasoline and diesel prices will be reduced. Effective August 12, 2026, the exceptional mechanism, initially established in July 2026, will now permit monthly price decreases ranging from 0.75% to 1.5%.

The government cites the volatility of international oil prices as the primary reason for this adjustment. The reform aims to gradually narrow the difference between global and national fuel prices while preserving economic stability and fiscal sustainability. The new formula dictates that the terminal sale price for a given period will be the previous period's value multiplied by a reduction factor within the specified range.

This latest change, outlined in Executive Decree 468, refines the implementation of the exceptional price reduction mechanism. Instead of an automatic, uniform reduction, the decree establishes a phased approach. The price decrease will start at the lower end of the range, 0.75%, and progressively increase towards the maximum of 1.5% over subsequent months. This ensures a more controlled adjustment in response to market fluctuations, according to officials.