Bolivia to End State Fuel Subsidies by 2027 under IMF Deal

Bolivia has pledged to eliminate its long-standing fuel subsidies beginning in January, a step tied to a new $1.9 billion financing pact with the International Monetary Fund that spans three years. President Rodrigo Paz's government forwarded legislation to the legislature to exclude hydrocarbon subsidies from the 2027 fiscal plan, forcing fuel prices toward full cost recovery. The president described the reform as a set of decisive policy actions and structural changes aimed at restoring external stability and ensuring fiscal and debt sustainability while fostering inclusive growth.

Economy Minister Christian Morales emphasized that the measure was a domestic solution to a fiscal gap, not a direct IMF directive. The existing gasoline subsidy will be maintained only until the January review, after which market pricing will be implemented together with social safeguards to mitigate hardship. Officials note that the subsidy program, costing roughly $2.9 billion a year, has depleted foreign-exchange reserves and encouraged illegal cross-border fuel smuggling. Past attempts to raise prices have sparked severe unrest, highlighting the political sensitivity of the issue.