Effect of eliminating gas subsidy for domestic use in Ecuador

Abstract

The losses and additional costs that Ecuador has due to the lack of border control and the smuggling of domestic use gas are millionaires, the subsidy is not focusing and there is no efficient scheme to benefit the neediest sectors. Elements that demonstrate the high degree of irresponsibility of the country in the care of this non-renewable resource. The study carried out analyzes the impact this generates in the fiscal, economic, political and social spheres. It is currently possible to eliminate the gas subsidy to the domestic use in Ecuador, without generating a political setback or economic uncertainty in the population, if the delivery of this resource is assigned to the depressed sectors of society from the application of new technologies and the using purified information from the ministries of social welfare, hydrocarbons and electricity. The purpose of the investigation is to determine the benefit that cause to Ecuador, at the current economic moment in which it lives, to eliminate this subsidy. By quantifying the consumption, production and import figures, the costs it generates this subsidy and the scenarios that can allow the Ecuadorian State to obtain savings and make efficient and coherent delivery of domestic use gas are determined, thus generating the elimination of existing damages and creating benefits for the poor class of the country.