Ecuador fuel price adjustment on July 12 likely capped at 5% ceiling despite international market decline

Ecuador’s Agencia de Regulación y Control de Hidrocarburos (ARCH) will implement new fuel tariffs effective July 12, 2026, with industry analysts anticipating the government will apply the maximum 5% monthly increase permitted under the band mechanism. The adjustment follows a June 12 increase that raised Extra and Ecopaís gasoline from $3.16 to $3.31 per gallon and diesel premium from $3.10 to $3.25 per gallon. Under the 5% ceiling scenario, Extra and Ecopaís would rise approximately $0.166 to $3.478 per gallon, while diesel premium would increase $0.163 to $3.414 per gallon.

The anticipated increase occurs despite West Texas Intermediate crude trading at $70.22 per barrel with a 1.67% variation, down from levels near $90 during Middle East conflicts. Ivo Rosero, president of the Cámara Nacional de Distribuidores de Derivados del Petróleo del Ecuador, explained that consumer prices depend not solely on WTI but on processed fuel costs in international markets, which have experienced notable increases. The band system protects consumers from abrupt increases by capping monthly rises at 5% while allowing reductions up to 10% under favorable conditions.

EP Petroecuador projects subsidies between June 12 and July 11 at $1.60 per gallon for diesel premium, $1.16 for Extra with ethanol, and $1.02 for Extra gasoline. Rosero indicated that international price reductions must first absorb existing state subsidies before reaching consumers, with clearer price decreases potentially visible in August if international markets maintain downward trends. ARCH noted Ecuador consumes fuel with approximately two months’ delay due to vessel transit times, meaning recent international price movements would materialize more clearly in August.

President Daniel Noboa subsequently signed Executive Decree 444, incorporating an exceptional mechanism to cushion international volatility and enable fuel price reductions. The decree coincided with WTI price declines in June and early July 2026 before the recent announcement ending the U.S.-Iran truce. Super gasoline remains unsubsidized and fluctuates directly with international market conditions. Camddepe recommended avoiding queues before adjustments and urged expanded dispatch quotas at distribution centers to prevent logistical problems experienced in previous months.