2024-07-03 07:45:11
The Central Bank of Ecuador presented a report comparing fuel subsidies with other areas such as health and education.
The amount allocated to the fuel subsidies reached 3.265 billion dollars, in 2023. That amount exceeded to health spendingwhich was 3,064 million in that period, according to the Ministry of Economy and Finance.
These subsidies to the Extra, Ecopaís and diesel and gas gasolines liquefied petroleum represented 67.5% of spending in educationwhich stood at $4.835 billion in 2023.
He Central Bank of Ecuador presented a report on the impact that these subsidies have on the Public finances.
Another comparison he made is against the social protection programs such as the Human Development Bonus (BDH), pension for the elderlyamong others. The result was that it exceeded by almost three times. The expenditure in these programs was 1,296 million dollars, with a coverage of more than 1.4 million beneficiaries.
By 2024, the General State Budget (PGE) Proforma establishes that fuel subsidies would reach 3,093 million. This value exceeds the transfers destined for the Social Securitywhich is 3,082 million, and Social Development, which is 1,549 million.
The gasoline subsidy reached 644 million dollars in 2023. This amount represented 20% of the total fuel subsidies.
Subsidies in public finances
He central bank of Ecuador He highlighted that between 2010 and 2023, fuel subsidies represented, on average, 12.8% of the Proforma of the General Budget of the Stateo.
By 2024, this percentage was set at 8.7%. This Central Bank report indicates that the highest share of fuel subsidies in relation to the Proforma occurred in 2011 and 2012, which was 25.2% and 26%, respectively. In addition, it was estimated that Ecuador loses approximately USD 200 million per year due to gasoline smuggling. The Central Bank of Ecuador considers the implementation of a new pricing scheme for Extra and Ecopaís gasoline to be opportune, “accompanied by monetary compensation to protect the most vulnerable population.”
The entity assured that this measure will allow the 644 million budgeted for gasoline subsidies in 2024, “mostly, to be redirected to protect the population that belongs to the lowest income deciles, mitigate the environmental impact and contribute to the sustainability of public finances.”
In Ecuador, fuel subsidies are concentrated especially in diesel, gasoline and Liquefied Petroleum Gas (LPG). From 2010 to 2023, a total of 53,922 million was allocated for fuel subsidies. 43% corresponds to diesel, 25% to gasoline and 18% to LPG. These three subsidies accounted for 86% of the total for the period analyzed.
By: EL COMERCIO