Ecuador starts to privatize: President Lasso accelerates the sale of 45 Petroecuador service stations
Guillermo Lasso’s administration is committed to fiscal discipline and the limitation of the “entrepreneurial state” in Ecuador, a function that has been poorly performed throughout the country’s history.
The implementation of the privatization of 45 service stations that correspond to the enigmatic state company Petroecuador, which monopolizes most of the operations in the domestic hydrocarbon market since 1971, under various administrative forms that have changed over time.
The denationalization of hydrocarbons would encourage competition in favor of users, and would encourage the capitalization of the system by eliminating the obstacles to the aggregate supply of the economy.
In a first stage, the aim is to privatize the fuel distribution services through the service stations, to then give way to the definitive privatization of the exploitation of the primary activities.
The strategy is similar to the one carried out by President Jair Bolsonaro in Brazil, since before presenting the first programs to privatize Petrobras (a maneuver that was completely annulled with the electoral result) the distribution of fuel was first privatized with the sale of Br-Distribuidora in 2021.
President Lasso reverses the decrees launched by Rafael Correa, which sought to give Petroecuador a special status and declared its services as “strategic” under the orbit of the state administration.
At the same time, Lasso promotes the deregulation of the energy sector, removing the state monopoly from Petroecuador and thus allowing the entry of private initiative in the investment of productive projects.
The private sector already has a presence in up to 11 energy projects tendered in 2022, which will greatly contribute to increasing the country’s oil and natural gas production in the coming years.
The offensive for privatizations also reached the financial sector, although still without major successes. The Ecuadorian government is actively seeking the privatization of Banco del Pacífico, the most important state financial entity in the country and the second in terms of profits.
However, the initiative had to be delayed due to the lack of bidders willing to accept the sale conditions.
With information from La Derecha Diario
More: Ecuador news in English, every day from The Rio Times.
Read More from The Rio Times