Energy Subsidies and Urban Consumption in Ecuador: Distortions and Pathways for Transition

Subsidios energéticos y comportamiento de consumo urbano en Ecuador: distorsiones y alternativas para una transición

Published 2026-01-30


https://doi.org/10.37116/revistaenergia.v22.n2.2026.742
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Vol. 22 No. 2 (2026): Revista Técnica "energía", Edición No. 22 ISSUE II
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EFICIENCIA ENERGÉTICA
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Energy Subsidies and Urban Consumption in Ecuador: Distortions and Pathways for Transition. (2026). Revista Técnica "energía", 22(2), PP. 122-135. https://doi.org/10.37116/revistaenergia.v22.n2.2026.742
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https://doi.org/10.37116/revistaenergia.v22.n2.2026.742
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Energy Subsidies and Urban Consumption in Ecuador: Distortions and Pathways for Transition. (2026). Revista Técnica "energía", 22(2), PP. 122-135. https://doi.org/10.37116/revistaenergia.v22.n2.2026.742

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Gabriela Araujo
Escuela Politécnica Nacional
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https://orcid.org/0000-0003-4555-1087 ORCID
Andrés Robalino
Escuela Politécnica Nacional
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https://orcid.org/0000-0002-4809-5606 ORCID
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Since the 1970s, energy subsidies in Ecuador have sought to guarantee universal access, but they have distorted urban consumption by fostering inefficiency, dependence on fossil fuels, and inequality. This study examines how artificially low prices have discouraged clean technologies and hindered energy efficiency, particularly affecting the urban residential sector. Using a bottom‑up approach, tariff sensitivity is evaluated through segmentation models with 16 and 7 variables, applying independence tests to identify significant redistributions. The results reveal structural stability in energy profiles, which supports the proposal of a gradual transition toward more rational pricing, accompanied by targeted policies, eco‑innovation, and compensation for the most vulnerable, as a pathway to a more sustainable, equitable, and fiscally responsible energy matrix.

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