Ecuador to withdraw diesel subsidy, redirect funds to social programs

13/9/2025 13:34

Ecuador's government said on Friday it would eliminate the nation's diesel subsidy and redirect the funds to social programs.



"For decades, the diesel subsidy represented a $1.1 billion burden on fiscal accounts, without truly reaching those who needed it," the government said in a post on X.



Under a decree signed by President Daniel Noboa, the price of diesel for the automotive sector will rise to $2.80 per gallon from Saturday until December 11. A price stabilization mechanism will follow to protect consumers from global price swings.



Subsidy cuts have triggered unrest in the past, but the government said passenger transport fares will remain unchanged, with $220 million in direct aid to the sector. Commercial transport will receive three months of compensation.



Funds will also support expanded social benefits, faster tax refunds and aid for small producers, the government said.