Chile Fuel Prices Rise as President Kast Faces Early Test

The newly inaugurated administration in Chile is facing its first significant political challenge following a sharp increase in domestic fuel prices. The government, led by President Jose Antonio Kast, activated a clause in the national fuel-stabilization mechanism on Thursday to align local costs with rising international rates driven by geopolitical conflict in the Middle East. The adjustment has resulted in a 30% price hike for 93-octane gasoline and a 60% surge for diesel. In the capital city of Santiago, many gas stations reported running out of premium fuel after motorists formed long queues earlier in the week. The sudden shift has sparked immediate public backlash, with citizens expressing concern over the rising cost of living. > "Honestly, I find this terrible. Its been so few days and hes already doing things that affect the entire middle class and lower class - but nothing is known about what hes going to do with the upper class," said Valentina Ortega, a driver in Santiago. Political analysts suggest the move could impact the president's early popularity. According to a survey by pollster Cadem, approval for Kast dipped four points to 47%, while disapproval exceeded approval for the first time since he took office on March 11. > "Nobody in any country is happy when gas prices go up. It immediately threatens his popularity in the short term and creates governance challenges depending on how long prices remain high," said Cate Klemme of Latin America advisory firm Southern Pulse. Finance Minister Jorge Quiroz stated that the government could no longer absorb the mounting cost shocks due to strained public finances. To mitigate the impact on citizens, the government announced it would freeze public transport fares through December. However, financial institutions like JPMorgan Chase & Co. noted that the jump in fuel costs could still trigger nonlinear inflation pressures. The Central Bank of Chile recently revised its inflation forecast, predicting a significant increase in the second quarter to approximately 4% annually. Attorney Francisca Alfaro noted that the fuel hike would likely have a ripple effect across the economy. > "Everything is going to go up because everything in Chile is transported by land. So food, produce, vegetables, all of that is going to become more expensive," said Francisca Alfaro. Kast has attributed the current state of public finances to the previous administration of Gabriel Boric, framing his leadership as an emergency government focused on economic recovery. Political expert Guillermo Holzmann from the University of Valparaiso observed that while the president is currently paying a high social cost, the administration hopes to achieve a more stable fiscal position once the crisis subsides.