Chile fuel prices surge as new government drops stabilization mechanism

Chilean fuel prices have risen sharply—gasoline up 32% and diesel up 62%—after President José Antonio Kast decided not to activate the Fuel Price Stabilization Mechanism (Mepco), passing the full international oil price increase to consumers. The move reflects a policy shift amid Middle East conflict-driven oil price spikes, raising domestic inflation and political risk. The government expresses concern over diesel prices, but the full economic impact remains uncertain.