Ecuador Is Now Selling Oil at a Loss

Given the headline of this thread...

Does it make sense that the price of gasoline at the pump is artificially capped at $1.48 per liter for the popular grade of gas*?

Would it cripple the EC auto-related industries to let this gas price gradually rise to true market levels?

Would it further weaken the public's wobbly support for leadership if market pricing were allowed?

Would it tend to reduce air pollution in the cities if gasoline was not artificially cheap?

Just askin'.

cccmedia in Quito

*Correction...  As reported correctly by Jesse Kimmerling later in this thread, the actual price of gasoline in Ecuador is $1.48 per gallon, not per liter.

Thank you for that incite. The flux of economics represents a vital component in deciding on a retirement location.

cccmedia wrote:

Given the headline of this thread...

Does it make sense that the price of gasoline at the pump is artificially capped at $1.48 per liter for the popular grade of gas?

Would it cripple the EC auto-related industries to let this gas price gradually rise to true market levels?

Would it further weaken the public's wobbly support for leadership if market pricing were allowed?

Would it tend to reduce air pollution in the cities if gasoline was not artificially cheap?

Just askin'.

cccmedia in Quito

That is almost $6/gallon.  Seems like raising that price would have another ripple effect through the economy, not as much as USA, where I filled up yesterday for $2.39/gal.

mugtech wrote:

cccmedia wrote:

Given the headline of this thread...

Does it make sense that the price of gasoline at the pump is artificially capped at $1.48 per liter for the popular grade of gas?

Would it cripple the EC auto-related industries to let this gas price gradually rise to true market levels?

Would it further weaken the public's wobbly support for leadership if market pricing were allowed?

Would it tend to reduce air pollution in the cities if gasoline was not artificially cheap?

Just askin'.

cccmedia in Quito

That is almost $6/gallon.  Seems like raising that price would have another ripple effect through the economy, not as much as USA, where I filled up yesterday for $2.39/gal.

It's not $1.48 per liter. It's $1.48 per gallon. Gasoline is subsidized in Ecuador because the last time they tried to remove the subsidies and raise it to market value the Quichua brought the country to it's knees by blocking the major roads and shutting down commerce. Keep in mind, cheap gasoline in Ecuador is the reason we have cheap busses, cheap taxis, cheap food, cheap everything that relies on trucking.

jessekimmerling wrote:

It's not $1.48 per liter. It's $1.48 per gallon.

Correct.  Thank you for the correction, Jesse.

I have added this correction to the bottom of my first post in this thread.  The Cheese Desk regrets the error.

cccmedia in Quito

jessekimmerling wrote:

Gasoline is subsidized in Ecuador because the last time they tried to remove the subsidies and raise it to market value, the Quichua brought the country to its knees by blocking the major roads and shutting down commerce. Keep in mind, cheap gasoline in Ecuador is the reason we have cheap buses, cheap taxis, cheap food, cheap everything that relies on trucking.

Wow !

This is an absolutely amazing situation.  In fact, as someone who grew up in the U.S. where the native tribes have seemed under control during our lifetimes, it is mind-blowing that the EC indigenous could prevent any attempt to help balance the budget through looser price controls on gasoline.

The recent "national strike" in which large numbers of indigenous put themselves in harm's way portends a scary potential scenario if gas prices were programmed to rise in such an inflammatory time.

With the price of crude so low and the indigenous in such a mood, Ecuador appears to be boxed in on this one.

cccmedia in Quito