Fuel Overview

Ecuador exports heavy refined products, such as fuel oil, and imports lighter products, such as gasoline, diesel, and liquefied petroleum gas (LPG). It has the third-largest oil reserves in South America. Its hydrocarbon resources are exclusively owned by the state, and state-owned oil companies account for most of the production. Ecuador's energy mix is dominated by oil, although its challenging investment environment and lack of domestic refining capacity limit oil revenues. Ecuador has relatively small proved natural gas reserves and a limited natural gas market. Ecuador limits foreign investment in the oil sector. Foreign oil and natural gas companies are allowed to enter into service contracts that offer a fixed per-barrel fee for their exploration and production activities. The move away from production-sharing agreements to service contracts has increased the government's share of revenue and state oil production.

There are three operative refineries: Esmeraldas, with the capacity to refine 110,000 barrels of oil per day, La Libertad, with a capacity of 45,000 and Amazonas (Shushufindi) with 20,000 barrels per day. The GoE decided to concession* the operation and administration of its three refineries, and the merger between state oil companies Petroecuador and Petroamazonas in year 2020. The decision is mainly due to the relatively high costs of refining crude oil, which is considered heavy, financial circumstances by the state and the expectation of producing gasoline at the Euro 4 standard.

So far the demand for natural gas in relation to the total energy demand in Ecuador is very low, which is why there are opportunities for the country to increase the use of this energy, taking advantage of its versatility, relative low pollution and favorable world production situation that has reduced prices internationally. Natural gas prices in the world market have been falling consistently in recent years, from $ 5.24 in 2009 to $ 1.63 in 2019, a drop of 69%, mainly caused by the growth in supply thanks to the development of projects in the shale fields and the availability and variation of prices in the main petroleum derivatives. At this juncture, the country could take advantage of these conditions to evaluate the relevance of replacing processes that use fossil fuels such as diesel, gasoline or liquefied petroleum gas (LPG), for a more abundant, cleaner and cheaper fuel. Among the main fields of opportunity for the use of natural gas are electricity generation, residential cooking and industrial heating processes, which could be scaled up through investment in transportation infrastructure and natural gas storage.

Source: https://www.petroenergia.info/ Fuel consumption in Ecuador in 2019

A case study in the application of natural gas is that of the transportation sector. In Ecuador, transportation is the sector that consumes the most energy (49.2% of the total), as well as the one that generates the most greenhouse gas emissions, with 50% of total emissions. Multiple projects seek to increase the efficiency of this sector, with measures that range from the implementation of new technologies to the generation of driving habits and generation of efficient routes. The implementation of natural gas in transportation, mainly heavy, has advantages such as the reduction in environmental pollution, particularly sensitive in large cities, lower cost and the generation of business opportunities for the participants of a technology in the mass adoption stage.

(*) Termogas Machala, natural gas LNG . Likewise, The Termogas Machala Thermoelectric Plant with its 252 MW installed power capacity is in the process of being concessioned to foreign consortia. The awarded concessionaire is expected to be able to produce from US$ 0.112 per kilowatt hour to US$ 0.116 per kilowatt hour.

For more information on government and fuel provider contact details, please see the following links: 4.1 Government Contact List and 4.7 Fuel Providers Contact List.

Fuel Pricing

Official pricing apply in determined period of time, it may vary without notice. Please refer to https://www.eppetroecuador.ec/ chart below.

Prices expressed in US dollars, per US Gallons.   

Conversion:  One (01) US gallon = 3.78541litres

LPG, Diesel, Gasoline

The terminal sale price for LPG products for commercial and industrial use, Diesel 2, Premium Diesel, Gasolines, Industrial Solvents, Reduced Crude Oil (Waste), Fuel Oil No. 4 and Fuel Oil No. 6, for the industrial sector, will be determined on a monthly basis by EP Petroecuador, based on the weighted average cost plus the costs of transportation, storage, marketing, a margin that may be defined by the indicated public company and the taxes that may be applicable.

Jet A1,  AvGas

The sale price of the Jet Fuel at the terminal will be calculated monthly by the EP PETROECUADOR, based on the weighted average cost plus transportation costs, storage, commercialization, a margin that may be defined by the indicated public company and applicable taxes. In case of not having the import price of the Jet Fuel, it will be calculated based on the score international used for this product, plus freight, insurance and other costs that may have caused the import. The sale price indicated on the paragraph will be compared with the prices of sale to the final consumer at international airports in border countries, defined by EP PETROECUADOR, and the highest price will be set. The natural or legal persons that operate inside and outside the Ecuadorian territory, who have aircraft built since 1990, that have their Air Operator Certificate current and provide air transport service for national and international passengers and / or cargo from Ecuador, will pay the sale price at the terminal minus 40%, provided that when operating on routes that include airports that are under the administration of the General Directorate of Civil Aviation and the airports delegated to the Authority Municipal, which have not been concessioned, except for the route to the Galapagos Islands and the supply by technical shutdowns. Similarly, national natural or legal persons and foreign companies that provide the international air transport service of passengers, mail and cargo in a combined form, which start operations to or from Ecuadorian territory on international routes that include any of the country's airports, will pay the terminal sale price minus 40%, for a term of three (3) years, counted from the beginning of their operations, as long as they meet with each of the following conditions:

• They operate an aircraft built after year 1990;
• Satisfy the established technical requirements
• Be the first to provide the international air transport service for passengers, mail or combined cargo on one or more international routes, prioritized by the Sector Council of the production,
• They must operate on the authorized international route (direct without stops) at least three (3) flights per week (round trip).

In no case will the Jet A1 Fuel terminal price be less than US $ 1.25 per gallon.

The sale price at the Avgas terminal for aircraft with international registration or registration national for private use, will be calculated monthly by EP Petroecuador, based on the cost weighted average plus transportation, storage, marketing costs, a margin which may define the indicated public company and the applicable taxes.

Seasonal Variations 

There are no significant seasonal variations that impact fuel refining capacity.

Government Pricing Variations

Until the 10th of each month, EP Petroecuador carries out the calculations based on the fuel supplier's costs and the sales prices of the previous month, so that, from 00:00 on the 11th, the new prices are reflected of fuels in each of the public and private service stations nationwide.

These government regulations allow controlling the price of oil derivatives so that the rise or fall in prices is neither greater nor less than 5% compared to the price of the previous month. This system protects consumers in relation to drastic increases in the price of a barrel of benchmark West Texas Intermediate (WTI) crude. Furthermore notice that fuel prices at the terminal and / or deposits at the supplier level and the sale prices to level of Marketer and Distributors, is calculated monthly by each actor of the fuel trade chain considering the East crude markers and WTI, according to appropriate, and applicable taxes.

Therefor the terminal sale price for LPG products for commercial and industrial use, Diesel 2, Premium Diesel, Gasolines, Industrial Solvents, Reduced Crude Oil (Waste), Fuel Oil No. 4 and Fuel Oil No. 6, for the industrial sector, will be determined on a monthly basis by EP Petroecuador, based on the weighted average cost plus the costs of transportation, storage, marketing, a margin that may be defined by the indicated public company and the taxes that may be applicable.

Fuel Transportation

Oleducto de Crudos Pesados (OCP) is 485 km in length and runs from Sucumbíos Province to the Maritime Terminal at Esmeraldas Pronvince with a capacity of 450,000-bbl/d OCP OF which 95% runs underground. The OCP is a private initiative.

Sistema Oleducto Trans-Ecuatoriano (SOTE), is 503 km in length. It has a capacity of 400,000-bbl/d and runs from Lago Agrio to the Balao oil export terminal on the Pacific coast.

Standards, Quality and Testing 

The Agency for the Regulation and Control of Energy and Non-Renewable Natural Resources (ARC) regulates, controls, audits and audits the activities of non-renewable energy and natural resources of Ecuador

In Ecuador, the extra gasoline has 87 octanes and the super has 92. A government program is being developed in order to increase the quality of fuels in the country's refineries to allow compliance with European standards.

The Agency for the Regulation and Control of Energy and Non-Renewable Natural Resources (ARC) completed on July 1, 2021, one year of institutional life. During this period, with the work of 787 technicians and officials throughout the country, he met important milestones in his management in the strategic sectors: electricity, mining and hydrocarbon. It is important to mention the relevant activities performed in this first year. The ARC made revisions to the regulations, in coordination with the Ecuadorian Standardization Institute (INEN), for petroleum products: gasoline, diesel; Regulations for the commercialization of Liquefied Petroleum Gas (LPG) and liquid hydrocarbon fuels were reformed; of feasibility for distribution centers; commercialization of natural gas; storage in tanks; and, instructions for domestic amounts, industrial cadaster, etc. The attributions granted to the Agency regarding the monthly setting of fuel prices, and their consequent control throughout the national territory, were assumed in a technical way.

Despite the pandemic, the ARC worked in a coordinated and continuous manner in the issuance of authorizations for the use of fuels in domestic amounts and in the industrial registry. More than 2,000 annual controls and more than 10,000 regular inspections of LPG warehouses and collection centers were carried out. Quality control of hydrocarbon derivatives was continuously maintained through the analysis of 19,345 fuel samples in the Hydrocarbon Quality Control Unit.

Note: The ARC has been created on July 1, 2020 and arose from the merger of the Hydrocarbon, Mining and Electricity Regulation and Control Agencies, this entity regulates, controls, audits and audits the activities of non-renewable energy and natural resources of Ecuador

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