Subsidio a los combustibles e incidencia sobre el Ipc: caso ecuatoriano 1974-2021.

Abstract

Since 1974, fuel subsidies have been part of Ecuador's economic reality, making this product an essential component of the national energy mix. This case study, through a historical-descriptive analysis, quantified the amount that the government spent on fuel subsidies from 2000 to 2020, finding that an average of 3.95% of the national GDP was assigned annually to the maintenance of this economic policy. These factors resulted in a sustained stability of fuel prices, which mitigated their impact on inflation. Finally, based on the specialized literature, we adapted a price displacement model identifying that the costs of the subsidy elimination would be borne mostly by the richest quintiles of the population. Although there would be a price increase in all expenditure categories, the resources freed by the elimination of subsidies could be used to cushion the impact on lower income families.