Written by Carlos Valdez
LA PAZ, Bolivia (AP) – Bolivian President Rodrigo Paz On Wednesday, it eliminated fuel subsidies in place for two decades and announced 100% increases, while decreeing a 20% wage increase to offset the impact of the measure.
The price of a liter of gasoline almost doubled, from 3.7 bolivianos to 6.96 bolivianos, while the price of diesel rose from 3.72 to 9.80 bolivianos per liter. The center-right president stated in a message to the country that the prices will be valid for six months and there will be free import of fuel.
To compensate for the adjustment, Paz announced a 20% salary increase and an increase in other existing bonuses for seniors and students. He also indicated that there will be a compensation bonus for informal workers.
“It is a very difficult moment,” Paz announced from the government headquarters, surrounded by his ministers. “We have received a country wounded in its economy, without dollars, with rising inflation and without fuel. The sick person is healed by the truth, and we decided to provide certainty with clear fuel prices and guaranteed supplies.”
“It is the end point of a model of lies, waste and corruption, and the beginning of a phase of sincerity and national reconstruction,” the president added, referring to the 20 years of leftist governments of Evo Morales (2006-2019) and Luis Arce (2020-2025), which maintained subsidies as an essential part of their program.
The country’s economy is bankrupt, with international reserves almost exhausted, Dollar shortage And without money to import fuel that the country does not produce. Fuel subsidies, which were deepened during the Morales and Arce governments, mean an annual drain of more than $2,000 million annually, according to Economy Minister José Gabriel Espinosa.
“Healing the economy is part of the philosophy of our government,” Espinosa added, who inherited the worst economic crisis in 40 years, with inflation that will end the year at 22% and a fiscal deficit of 12.5% of GDP.
During the election campaign, and even after taking office on November 8, Paz promised gradual adjustments to fuel prices to avoid a strong impact on the population’s economy, but in the end he opted for a 100% increase.
The agricultural industries sector had demanded the withdrawal of support to ensure supply, because the shortage paralyzes the production system, but transporters in the public sector demanded maintaining the support.
There were no immediate reactions from the union sectors on Wednesday evening. For their part, several service stations in La Paz suspended sales to adjust their prices after the president’s announcement was announced.