Noboa eliminates diesel subsidy in Ecuador, which amounts to $1.1 billion annually

Quito.- Ecuador's President, Daniel Noboa, decreed this Friday the elimination of the diesel subsidy, a measure that according to the forecasts of the Government would mean a saving in state spending of 1.1 billion dollars that ministers now announce will be allocated to social protection measures and subsidies to encourage national production.

Noboa took the step of eliminating the diesel subsidy after having already done so last year with the Extra and Eco País gasolines, the most consumed in the country, which currently register consumer prices similar to international values, after having progressively equalized them after their unfreezing. The elimination of fuel subsidies is one of the most sensitive political decisions in Ecuador, which former presidents Lenin Moreno (2017-2021) and Guillermo Lasso (2021-2023) already tried to make without success. They had to back down in the face of the two largest waves of protests that occurred in the country, led on both occasions by the indigenous movement. These measures are part of Noboa's economic plans to reduce the state deficit, which reached almost 5% of the gross domestic product (GDP) when he came to power in 2023, and to meet the goals of the International Monetary Fund (IMF) credit program, which amounts to 5 billion dollars over a four-year period (2024-2028). In addition to the elimination of fuel subsidies, there are cuts within the state administration, such as the government's reduction from 20 to 14 ministries and the dismissal of 5,000 civil servants.

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The disappearance of the diesel subsidy will come into effect from this Saturday and will imply an increase in the price of this fuel at service stations from $1.80 per gallon (3.78 liters) to $2.80.

The measure was announced in a message to the nation issued on the night of this Friday with a group of ministers who spoke on behalf of President Noboa, who did not appear in the address.

A la ciudadanía: pic.twitter.com/IMUnh1Oj0L

— Comunicación Ecuador 🇪🇨 (@ComunicacionEc) September 12, 2025

"We bravely face the decisions that must be made," began the Minister of Economy and Finance, Sariha Moya, for whom "resources must go where they are needed." "For decades, the effort of all Ecuadorians has financed a subsidy that should guarantee well-being but has flowed through a pipeline that diverted a large part of the resources to smuggling, to mafias such as illegal mining and to privileged people who did not need it," Moya pointed out. "We have closed that key to afford something better, so that the resources go where they are needed," he reiterated. The Minister of Transportation and Public Works, Roberto Luque, assured that passenger transport prices will not rise, stating that there will be a mechanism to compensate the units with between 400 and 1,000 dollars per month. "This mechanism, which represents an investment of 220 million dollars, is ready and working," said Luque. He also anticipated subsidies of up to $20,000 to scrap old vehicles, totaling $150 million, and credits to purchase new units at a subsidized preferential rate of 9%. The minister also anticipated a payment of 80 million dollars for historical debt with passenger transport and a three-month compensation to commercial transport. On his side, the Minister of Agriculture and Livestock announced the delivery of subsidies to farmers as well as the delivery of machinery including tractors to peasants and engines to artisanal fishermen. In social protection, the Executive announced since October the delivery of the Human Development Bonus to 55,000 new families, as well as the refund of the value added tax to some 115,000 people over 65 years of age and around 80 million dollars for the same concept to builders of real estate projects.