Financial impact of subsidy removal partially offset by temporary bonuses, loans, and social support measures.

Projected savings in 2025 and 2026

The government’s decision to eliminate the diesel subsidy is expected to bring Ecuador significant fiscal relief, though at the cost of temporary compensation programs that will partially offset the savings. According to the Ministry of Economy and Finance, maintaining the subsidy in 2025 would have required $1.243 billion. With its removal, the state will instead spend around $819 million on compensation packages, generating savings of $424 million for the year. By 2026, as most of these measures expire, projected savings are expected to rise to more than $1.1 billion.

Finance officials emphasized that the compensation is limited in duration. For example, transporters will receive bonuses between $400 and $1,000 for eight months, extendable up to a year, while heavy-duty and tourism transport sectors will only be supported for three months. The “Raíces” bonus for agricultural producers is a one-time $1,000 payment.

First compensations distributed

The distribution of benefits began September 15th. By that afternoon, 1,665 transport operators, including intercantonal, interprovincial, and intraprovincial drivers, had received their first payments. In parallel, 70,000 agricultural producers received the $1,000 Raíces bonus, which the government describes as seed capital for sustainable growth. Officials noted that 100,000 producers are slated to benefit in total.

Compensation measures for transporters

The transport sector, one of the most diesel-dependent, is at the center of the government’s plan. Approximately 23,300 passenger transport drivers—urban, interprovincial, and intraprovincial—will receive monthly payments ranging from $400 to $1,000, representing an investment of $220 million.

Commercial transport operators in heavy cargo, mixed cargo, school, institutional, and tourism services will also receive three months of financial aid, though the specific amounts were not disclosed. In addition, a New Transportation Plan worth $150 million has been launched to modernize the fleet. It includes a scrappage bonus of up to $20,000 per vehicle and preferential-rate loans at 9% interest.

The state has also pledged to address historic debts in the sector, promising $80 million in payments to passenger transport operators. Another $10 million will go toward the acquisition of road safety vehicles, while $23 million is earmarked for rest areas and infrastructure improvements on the national road network.

Expanded social support

Beyond transport, the government outlined 18 total compensation measures designed to protect vulnerable groups. Beginning October 1, 2025, 55,000 additional families will be incorporated into the Human Development Bonus program. At the same time, the VAT refund system will be extended to directly benefit 115,000 senior citizens, representing a $130 million investment. A further $80 million will be allocated to VAT refunds for real estate developers.

Support for agriculture and fisheries

Agriculture is another sector targeted by the measures. Alongside the Raíces bonus, Banecuador will inject $100 million into the “7×7” credit line, which offers seven-year loans at a 7% interest rate. The government also announced an agricultural modernization program that will distribute 1,200 tractors—400 this year and the rest by 2026—as well as 600 outboard motors for artisanal fishermen.

Balancing fiscal stability and social aid

The government has argued that the diesel subsidy, which cost $1.1 billion annually, was unsustainable and required redirection of resources. Finance Minister Sariha Moya stressed that while nearly $893 million is already committed to nine of the compensation measures, the long-term benefit lies in the eventual phase-out of these supports.

Officials maintain that the elimination of the subsidy will strengthen the country’s fiscal stability, while the compensation programs provide transitional support for sectors most directly affected by higher fuel prices. The challenge will be managing discontent in transport, agriculture, and vulnerable households as the temporary benefits expire, and savings materialize in the public accounts.