Early Wednesday morning, the government withdrew from Congress the bill that had been submitted the night before to limit fuel price increases. The decision, instructed by the Ministry of Finance, sought to prevent the legislative process from interfering with the talks that La Moneda had opened with transport industry associations in an attempt to end the protests.
The negotiation was left in the hands of the dual minister of the Interior and Segegob, Claudio Alvarado, who during the day led a series of meetings with the groups leading the protests. The aim was to expand the Executive's initial proposal, which contemplated moderating the pass-through of international price increases to local prices by around $20 per liter, but which did not include specific measures for the transport sector.
And although the talks ended with a considerably broader offer from the government, the leaders left La Moneda shortly before 8:30 p.m. without calling off the mobilizations.
The explanation they gave was that they had to submit the proposals to their grassroots members for consideration and that there were still demands that had not been addressed.
The Executive's latest offer
After the last meeting, Alvarado announced the main components of the new bill, which the Executive committed to resubmitting to Congress on Thursday. The first measure aims to reverse the fuel price increase that…
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Early Wednesday, the government withdrew the bill that had been introduced the previous night to limit fuel price increases from Congress. The decision, instructed by the Ministry of Finance, sought to prevent legislative processing from interfering with the discussions the Executive Branch had opened with transport unions to try and end the demonstrations. The negotiation fell to the Minister of the Interior and Segegob, Claudio Alvarado, who led a series of meetings with the groups leading the protests throughout the day. The objective was to expand the Executive's initial proposal, which contemplated moderating the transfer of international increases to local prices by around $20 per liter, but which did not incorporate specific measures for the transport sector. Although the conversations concluded with a considerably broader offer from the government, the leaders left La Moneda shortly before 8:30 PM without lifting the demonstrations. Their explanation was that they needed to submit the proposals for consideration by their bases and that there were still demands that had not been met.
The Executive's Last Offer
Following the last meeting, Alvarado announced the main components of the new project, which the Executive committed to reintroducing to Congress this Thursday. The first measure aims to reverse the fuel price increase, which is scheduled to take effect this Thursday through the Fuel Price Stabilization Mechanism (Mepco): $42 per liter for diesel and $39 for gasoline. According to the minister, the "restoration" would take place next week, provided the initiative completes its legislative process and is promulgated no later than Tuesday. However, the main news was the decision to freeze fuel price increases until the first days of February. "The second good news for all Chileans is that the government has decided to freeze the increase in fuel prices until the first days of next February. That is, almost 90 days without fuel price increases," Alvarado announced. This definition implies a significant concession for an administration that has sought to make expenditure containment one of the hallmarks of its management. Within the sector, it opens an ideological tension: price freezing means market intervention, a mechanism against which the sector has historically maintained distance. Furthermore, the extension of the benefit for recovering the specific tax for cargo transport was added. This measure, whose expiration was scheduled for December, will be extended until December 2027, in line with commitments the Executive had previously made to the sector. The minister also announced a correction to the application mechanism of this tax. He explained that transporters face a problem when the specific tax results in a negative figure, a situation that generates an additional payment. The new text will seek to eliminate this effect.
Reporting on the negotiation results, Alvarado highlighted that the Executive had put all its capabilities at disposal to listen to the unions' demands and present concrete commitments. However, he also hinted at his displeasure with the leaders' decision not to end the protests with the announcement. "Positive things always come out of dialogue, and today we would have liked these good news for Chileans to have been accompanied by the leaders with whom we shared the day," he stated. He added that the union representatives acknowledged the government's effort and shared the announced measures, but they had to convince their bases. The minister, in any case, hardened his message regarding the continuation of the protests. "Starting tomorrow, there are no excuses for obstructing free passage," he warned, while reiterating that the right to demonstrate cannot translate into road blockages or affect economic activity.
Pending Demands
Upon leaving, the leaders' stance pointed precisely to the fact that the announced measures, while representing progress, did not meet all their demands. Outside La Moneda, Cristián Sandoval, president of the Confederation of Northern Transport Workers, explained that one of their main requests was to extend the freeze for a longer period and achieve an effective reduction in the specific tax. "We need the reduction of the specific tax because everything they have given so far is long-term. (...) We asked Minister Alvarado for 120 days for a fuel price freeze. And the second was regarding the specific tax, where we also asked for a delta so we could effectively reduce it," he said. The day had begun with a first meeting between Alvarado and Freddy Martínez, a leader of the Central-South Truck Drivers Confederation, attended also by the Undersecretaries of Finance, Segegob (spokesperson), Economy, Transport, Public Works, and the Interior. After that meeting, Martínez evaluated the Executive's willingness and assured that there was openness to freeze fuel prices. Later, the minister received the representatives of Fuerza del Norte, to which Martínez joined again. During a break in the conversations, Sandoval had indicated that there were good intentions, but no agreement yet. This was ultimately the tone of a day that, despite the Executive's announcements, ended without the unions committing to lifting the demonstrations.
In parallel, during the morning, President José Antonio Kast hardened his tone toward transporters. In an activity linked to the operation of Amazon Web Services in the region, the Mandatary linked respect for free passage with the necessary conditions to attract investment and generate jobs. "If someone wants more work, well, they have to obey the law. If someone wants more investment in Chile, they have to allow free passage," he affirmed, before warning that blockades could have consequences that transcend the specific conflict: "That sets off alarms around the world." Nevertheless, the Executive now faces pressure to resolve a controversy that threatens to drag on despite the new measures committed. The clock is running against La Moneda: on Friday, Kast is scheduled to depart for Asia to begin his presidential tour, which will take him to Vietnam, China (on the occasion of APEC), and Japan, meaning the government has a narrow margin to try and steer the conflict before the Mandatary's departure.