Ecuador's Super Gasoline Price Plummets 87 Cents: Market Forces at Play

Ecuadorians are experiencing one of the most significant price reductions for Super gasoline in recent times, with the suggested price dropping by 87 cents from $5.61 to $4.74 per gallon. This marks a decrease of approximately 15.5% over the past month.

The substantial drop in Super gasoline prices contrasts sharply with the minimal reduction seen in Extra and Ecopaís gasolines, which decreased by only 2.3 cents per gallon, from $3.265 to $3.242. The key difference lies in the pricing mechanisms: Super gasoline operates under a liberalized market, making its price dependent on international market conditions, while Extra and Ecopaís are subject to state regulation.

Ivo Rosero, president of the National Chamber of Petroleum Derivatives Distributors of Ecuador (Camddepe), explained that Super gasoline is not subject to the regulated price bands applied to Extra, Ecopaís, and premium diesel. Its price is influenced by international market conditions and a distinct methodology that includes import costs, transportation, storage, and commercialization. "External variations can be reflected more strongly in this fuel," Rosero noted.

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The price depends on international market conditions and a different methodology, in which variables such as import costs, transport, storage, and commercialization intervene. Therefore, external variations can be reflected more strongly in this fuel.

Juan David Espinoza, a professor at the Business School of the Universidad Internacional del Ecuador (UIDE), concurred that Super's price behavior is closely tied to the international market. He elaborated that while falling oil prices reduce international reference costs, the final price is also affected by derivatives, transport costs, import insurance, international supply, and geopolitical risks. This exposure explains why Super gasoline can experience more significant price fluctuations than regulated fuels.

President Daniel Noboa recently reformed the exceptional mechanism for Extra, Ecopaís, and premium diesel through Executive Decree 468 on August 11. The regulation establishes monthly reductions ranging from 0.75% to 1.5%, conditions permitting. Super gasoline is not included in this mechanism, highlighting the divergent market forces affecting its price compared to other fuels.

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The fall of oil and refined fuels reduces international reference costs, but the final price does not depend solely on the value of the barrel. Derivatives, transport costs, import insurance, international supply, and geopolitical risks also intervene. That exposure helps explain why Super can experience considerably greater movements than fuels subject to regulation mechanisms.