The Economy of Bolivia
Fuel Subsidies and Fiscal Pressure
Heavily subsidised fuel costs the state a lot and, together with dollar shortages, has caused fuel queues and political tension.
Cheap fuel, costly system.
Subsidy
Bolivia sells petrol and diesel far below import cost.
Cost
The subsidy burden grew as the country became a net fuel importer.
Shortages
Dollar scarcity made fuel imports harder, causing queues.
Reform
Any subsidy removal is politically sensitive.
A long queue
Trucks line up for diesel outside a station.
Ignoring the political difficulty of subsidy reform
Sudden price hikes provoke protests.
Key takeaways
- Fuel is heavily subsidised.
- Import costs weigh on the budget.
- Shortages cause queues.
- Reform is politically sensitive.
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