Protesters Continue to Block Key Roads Throughout Ecuador Over Fuel Price Increase

Protesters Continue to Block Key Roads Throughout Ecuador Over Fuel Price Increase

November 3, 2021

On October 18, a nationwide protest led by unionized farmers and teachers in Ecuador erupted over rising fuel prices. Protesters have continued to block major roads with burning tires and large vehicles in at least thirteen provinces throughout the country. The demonstration was initially organized by the National Agricultural Front for Food Sovereignty of Ecuador (Fenasae), the National Union of Educators (UNE), and the Popular Frontalso unions to demand that the administration of President Guillermo Lasso freeze fuel tariffs and implement price controls on fuel which has gone from USD 1.48 (EUR 1.28) per gallon to USD 2.55 (EUR 2.20) in one year. The protest has since escalated, with indigenous groups, student organizations, labor unions, and other groups joining the demonstrations, adding more pressure on the Lasso administration.

An organized general strike was called on October 26 despite President Lasso’s concession to suspend gradual fuel price increases. Unions and other groups are maintaining that they will continue to strike until the price of fuel is frozen. President Lasso has threatened to use military force against anti-government demonstrations and has referred to some protesters as “coup plotters”. Previous protests held by anti-government activists on October 20 turned violent with unconfirmed reports of arson and kidnapping. The demonstrations have continuously or intermittently cut road access in the provinces of Guayas, Carchi, Los Rios, Manabi, Pichincha, Chimborazo, Tungurahua, Imbabura, Bolívar, Cotopaxi, Morona Santiago, Pastaza, and Azuay. Demonstrations in Pichincha, Imbabura, Cotopaxi, Carchi, Los Ríos, and Guayas have reportedly been the most disruptive, causing significant delays in traffic and cargo movement on several roads. Numerous roads in the northern part of Quito are impassable, preventing nearly all access to the city from the north. Police have attempted to unblock roads and disperse protests, but demonstrators have typically returned shortly after to continue the blockades.

Since 2020, Ecuador has readjusted the price of fuel to keep in line with international market price standards. President Lasso has maintained a free price fluctuation policy for fuel and said he will not support caps on fuel costs.  The president said he may reinstate fuel subsidies for cargo carriers but so far has not implemented this change. Over the course of the protest, Everstream Analytics has been tracking where protesters have set up blockades throughout the country as shown in the figure below.

Figure 1: Locations of road blockades since Oct. 18, 2021

In the province of Guayas, road blockades have been reported in the towns of Daule, Duran, Santa Lucia, El Paso, Petrillo, Nobol, Lomas de Sargentillo and Samborondón. Farmers are using tractors to prohibit the passage of traffic. The highways connecting the towns of Manta and San Mateo in Manabi province, and Tulcan and Bolivar in Carchi have also been blocked by demonstrators. In the province of Los Ríos, severe traffic congestion and road blockages have occurred in the town of Babahoyo. The affected roads include: Cruce de Chilintomo, Redondel la Chorrera, and Rcto. 24 de Mayo. Protesters have also targeted the Tulcan-Bolivar highway, which connects the Ecuadorean border with Colombia, interfering with cross-border cargo transport. Additionally, road blockades have cut a portion of the Pan-American Highway in the province of Azuay.

Outlook

On October 27, leaders from several unions and other organizations announced that they have planned a national convention scheduled during the week of November 1 to organize an indefinite nationwide strike. A decision is expected to be announced between November 3-5. Union leaders said they will consider negotiation avenues with government representatives prior to the general strike announcement. However, given that President Lasso is attending the COP26 Climate Change Conference in Glasgow from October 28-November 7, it is unlikely that meaningful policy changes will be made in time to quell further protests.

 In 2019, a wave of nationwide mobilizations paralyzed roads throughout Ecuador as protesters demanded the repeal of Decree 883 which eliminated gasoline subsidies under the Moreno administration. The strike was held from October 2 to October 13 and was resolved when negotiations, mediated by the United Nations, between the Confederation of Indigenous Nationalities (CONAIE) and the government, resulted in the reinstatement of fuel subsidies. President Lasso previously said he will not rule out a military response should demonstrations continue, indicating that the protests could turn violent and negotiations over policy changes may take longer to materialize. Additionally, should union leaders vote to continue the strike, major thoroughfares will likely be blocked intermittently in several provinces. The blockades will be exacerbated and prolonged if President Lasso follows through with a military response.

Disruptions to port operations have not been reported as of October 28, however, should the protests intensify, cargo destined for or leaving the ports of Guayaquil and Manta may be impacted given that road blockades are ongoing in those areas. Additionally, cross border ground transport on Tulcan-Bolivar highway (Ecuador-Colombia border) may be impacted by intermittent blockades.

Recommendations

  • Monitor further protests and road blockades. To anticipate ground freight delivery delays, companies reliant on logistics in Ecuador should stay abreast of future planned protests and associated road blockades. There is also the possibility of the blockades escalating to port and border delays, particularly at the ports of Guayaquil and Manta and along the Ecuador-Colombia border. Everstream Analytics’ Risk Intelligence solution monitors these escalations in near-real time to enable supply chain professionals to take preemptive action.
  • Consider alternative shipping methods. Ground transportation is likely to remain disrupted for the duration of the strike. Should the decision be made to extend the strike indefinitely, companies should consider alternative shipping methods, including air, rail, and maritime shipping, for time-critical cargo. Using Everstream Analytics’ Transportation Planning capabilities, companies can assess the risks associated with critical routes and decide whether an alternative form of transport will better ensure on-time and in-full delivery.
  • Map and visualize supply chain networks ahead of planned demonstrations. Companies are advised to map and visualize supply chains for a more comprehensive view of potential network vulnerabilities. Using Everstream Analytics’ Network Planning capabilities, companies can monitor end-to-end logistics networks to adapt to and better prepare for unpredictable disruptions like indefinite road blockades.

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