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Natural gas here is really cheap. That is, LP Gas. A 15 kg canister costs a $1.50. Yes, a container bigger than the one you buy in the US for your barbecue, that costs $17 or more in the US, costs far less here.
Gas is subsidized here. It has been so for years; I can remember when I worked here in 1994 and the subsidy was a hot political issue, and it has become an issue once again. Because gas is not centralized and not part of the general infrastructure, everyone, including restaurants and industry, uses gas in tanks. These tanks can be bought at dispensing stations all over the country, in any city or town.
If you’re a restaurant or a business, you’re not supposed to get the subsidized rate; you can’t get it for the larger size tanks. But many restaurants will keep 20, 30 or more small tanks on site in order to get the subsidy. That’s the heart of the problem; no one has been able to find a way to get the subsidy to those who most need it, and restrict those who don’t need it from getting it.
President Correa has been dealing with the issue, trying to design a system that would control access to the subsidy so that it goes only to those who need it. Thus far, no one has come up with a solution. If the subsidy were to be removed altogether, the country would come to a screeching halt and there would be marching in the streets. He’d like to raise the price-for those who can afford it-to $13 a canister or so. I don’t know the details of what he’s proposing, but congress has refused to pass any legislation regarding it just yet.
We’ll be watching to see if this hot potato goes anywhere; meanwhile, any new system will have to prevent those well enough off to have a maid from sending her down the way to buy cheap gas. Any of you policy wonks out there, I’d love to hear your solution to this issue.