Ecuador's fuel subsidies benefited smugglers and the well-off. That did not stop a backlash when Lenín Moreno abolished them
is facing his biggest crisis since he was elected two and a half years ago to clean up the mess left by his populist predecessor, Rafael Correa. The country is in turmoil. The president’s decision to rid the country of cherished but wasteful fuel subsidies has provoked nationwide riots and looting. Shops, agricultural estates and government offices in Quito, the capital, have been ransacked. A curfew has been imposed in areas close to government buildings and airports.
A recent study by the Inter-American Development Bank says that the subsidies benefited mainly the better-off. Moreover, much of the fuel was smuggled to Ecuador’s neighbours, Colombia and Peru, where official prices have been far higher. Mr Moreno knew his decision—by presidential decree—would provoke outrage. No previous government had dared to do it.has commended Mr Moreno for his audacity in taking the subsidy-cutting decision by decree.
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