Following the neutralization of the Fuel Price Stabilization Mechanism (Mepco), President José Antonio Kast's government has promulgated a law providing relief measures against historic fuel price surges triggered by the war in Iran. Finance Minister Jorge Quiroz emphasized fiscal responsibility, detailing bonuses for transporters and paraffin price cuts.
In a continuation of efforts to address the fuel crisis, Chile's Executive under President Kast has enacted the fuel aid law after Congress's swift approval. This follows the March 25 decrees that neutralized Mepco—previously adjusted to pass on international oil price hikes from the Iran war affecting the Strait of Hormuz—and froze public transport fares.
The new law delivers a 100,000-peso bonus for six months to taxi drivers, bus drivers, and school van drivers, while funding reductions to return paraffin prices to February levels, effective by next Monday. Resources are sourced from suspending the transitory differentiated credit on the specific diesel tax for large non-transport companies, sparing smaller enterprises as negotiated in Congress.
Finance Minister Jorge Quiroz highlighted the government's awareness of the crisis's impact on Chileans, stating from La Moneda: “It demonstrated awareness of the problem currently affecting Chileans, stemming from the war and the need to address the fiscal responsibility demanded by the moment.” He added, “We empathize with the population, it's not easy, but we face this problem with fiscal responsibility,” noting the bill's near-unanimous passage in one week despite fiscal council alerts on risks.
Energy Minister Ximena Rincón framed the crisis as an opportunity: “This crisis affecting the whole world [...] must transform into an opportunity,” to accelerate electromobility initiatives begun in 2017.
Quiroz, early in the administration's tenure, rejected notions of state bankruptcy—clarifying references to a deteriorated fiscal position—and affirmed ongoing reviews of fiscal sustainability.
