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# **Ecuador**

The Government of Ecuador has frozen the maximum retail prices of regular gasoline, diesel, and LPG for 12 years. Only the price of super gasoline is permitted to float, but its price had not been changed for six years before an increase of US$0.02 per gallon (US$0.005 per liter) in October 2015. The price of LPG sold in 15‐kg cylinders is exceptionally low at US$0.11 per kg (US$1.60 per cylinder). The LPG subsidy started in the 1970s, and by now the population has grown accustomed to virtually free cooking gas. The government said in 2014 that it planned to increase the refill cost of a 15‐kg LPG cylinder from US$1.60 per cylinder to $15–20 by 2017 ( _Elpais_ 2014).

The central bank reported that the country had spent US$6.1 billion in 2014 on fuel imports, against which consumers had paid US$2.2 billion. Subsidies are falling only because of low world oil prices, and not because of any subsidy reform program by the government.

# **Arab Republic of Egypt**

The budgetary allocation for fuel subsidies in Egypt reached nearly 7 percent in FY 2012/13 (July 2012 to June 2013) before falling in the subsequent years (Table 10). The price of gasoline with 80 RON was frozen between 1992 and July 2014, by which time its value in U.S. dollars had fallen to US$0.13 per liter. Other fuel prices were frozen between 2008 and 2013, when the prices of fuel oil and LPG were raised. The total energy subsidies reached the highest level in 2013/14, amounting to US$18 billion for fuel and another US$3.5 billion for electricity, valued at cash costs (only imported fuels are valued at market prices, while domestic fuels are valued at production costs). The government estimates that, if valued at international prices, the economic value of energy subsidies would be more than double the financial subsidy figures reported in the budget. Low energy prices have historically directed investments in favor of energy‐ and capital‐intensive industries (EEDC 2015a).

**Table 10: Budgetary cost of fuel subsidies in Egypt**

|Unit|FY 2010/11|FY 2011/12|FY 2012/13|FY 2013/14|FY 2014/15|FY 2015/16<sup>a</sup>|
|---|---|---|---|---|---|---|
|LE billion|95.5|120|128.3|126.2|72|61.7|
|US$ billion|16.4|20.0|19.9|18.1|9.8|7.9|
|% of GDP|4.9|6.1|6.9|6.0|3.0|2.2|

_Sources:_ IMF 2015b for 2010/11 and 2011/12, government for 2012/13 to 2014/15, Economist Intelligence Unit 2015 for 2015/16. a. Approved budget.

The government raised power tariffs for every consumer category and the prices of most fuels in July 2014. The fiscal savings from the combination of the 2014 price increases and the fall in international petroleum product prices were about US$7 billion, but prices remain highly subsidized. For example, a 78‐percent increase in July 2014 raised the retail price of 80 RON gasoline to only US$0.22 per liter, and a 41‐percent increase saw the price of 92 RON gasoline rise to US$0.36 per liter. Natural gas prices to industries range from about US$3 per mmBtu for the power sector after a 58‐percent increase to US$8 per mmBtu for cement after a 33‐percent increase. Natural gas tariffs for households begin at about US$1.50 for the lowest of the three increasing tariff blocks, while bottled LPG for residential use (not raised in July 2014) costs a mere US$0.084 per kg. Diesel fuel for all sectors is US$0.24 per liter despite a