Ecuador to scrap monthly fuel price increases, establishes fixed price -Lasso - Reuters

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Ecuador's President-elect Guillermo Lasso reacts as he speaks to media in Quito, Ecuador April 12, 2021. REUTERS/Luisa Gonzalez/File Photo

QUITO, Oct 22 (Reuters) - Ecuador will scrap monthly price increases on fuels and will instead fix prices for gasoline extra and diesel, President Guillermo Lasso said on Friday.

Lasso's decision follows pressure by indigenous and other organizations, who had called a national protest for next week in rejection of fuel price rises and the government's economic and social policies.

"I have decided that from today monthly fuel price increases are suspended," Lasso said in a video broadcast.

As of now, the price of gasoline extra is set at $2.55 a gallon, Lasso said, while the price of diesel will be fixed at $1.90 a gallon.

Previously prices of gasoline extra - which sees the greatest consumption in Ecuador - and diesel were set monthly by a fluctuating system based on the price of oil and related products.

The model was adopted in May 2020 by former President Lenin Moreno, months after protests forced the government to backtrack on plans to scrap fuel subsidiaries as part of austerity plans.

The new fixed prices are slightly higher than those that were due to be set for this month.

"We have listened to you, the people, and also to political and social sectors to reach agreements which bring us to a stable environment, in which the economy can grow and build jobs," he said.

Lasso will also enforce fixed prices of basic supplies, he said, in a move to help Ecuadorians facing the economic effects of the coronavirus pandemic.

However, the price freeze was dismissed by groups who pledged to go ahead with protests.

"We reject the new fuel price increase, which the president has deceptively called a price freeze," Leonidas Iza, president of indigenous organization CONAIE, said following a meeting in the province of Chimborazo.

"We declare a national protest as of Oct. 26," he added. Several unions and social groups have pledged to join demonstrations.

Reporting by Alexandra Valencia Writing by Oliver Griffin Editing by Angus MacSwan

Our Standards: The Thomson Reuters Trust Principles.

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