In Argentina an agreement with the imf that involves cutting energy subsidies cost Martín Guzman his job as economy minister on July 2nd.It is not hard to see why governments are so sensitive to the price of fuel.Latin America is a region of long distances in which roads are paramount in the movement of both goods and people.In Venezuela in 1989 an abrupt decision by Carlos Andres Perez, shortly after his lavish inauguration as president, to double the petrol price triggered days of rioting that cost some 400 lives.These events discredited Venezuelan democracy and paved the way for Hugo Chávez, a populist strongman elected a decade later.When Brazil began to phase out fuel subsidies, a truckers’ strike lasting a fortnight in 2018 brought the country to a halt and helped Mr Bolsonaro, who supported it, win that year’s election.In Ecuador Mr Lasso’s predecessor, Lenín Moreno, was almost toppled by an insurrection by indigenous groups and leftists against a cut in fuel subsidies in 2019.While across-the-board fuel subsidies may be good politics, they are bad policy.Since the better-off consume more petrol than the poor, they do nothing to reduce inequality.And they run counter to the region’s commitments to reduce fossil-fuel use to combat climate change.
