Bolivia Ends 20 Years of Cheap Diesel: What the 83% Price Rise Means for Expats

BOLIVIA · ECONOMY & FUEL POLICY

Updated 2 times · Latest: Wednesday 23 September 2026

After more than two decades of some of the cheapest diesel in the Americas, Bolivia has let the price jump by about 83% overnight. It rose from Bs9.80 (about US$0.89) to Bs17.95 (about US$1.63) a litre. For expats the direct hit is modest; the indirect effects, through bus fares and food prices, are not yet quantified. Here is what Supreme Decree 5716 actually does, why the government moved now, and what to watch in the coming days.

What Supreme Decree 5716 Does

The decree was approved on Friday 18 September and takes force from Saturday 19 September. It sets the retail diesel price at Bs17.95 (about US$1.63) per litre including VAT, up from Bs9.80 (about US$0.89) — a rise of about 83%. It repeals Supreme Decree 5676 of 16 August and Supreme Decree 5698 of 1 September. Those were the two stop-gap measures of the past five weeks.

Instead of a fixed price, DS 5716 ties diesel to the Argus ULSD Colonial 62 international reference. The band is plus or minus 5%. The reference price is calculated on business days. The ministry responsible has five working days to publish the regulation governing the band. In practice this means the pump price can now move in both directions — down as well as up. It will no longer sit frozen for years, as it did under the subsidy regime.

The decree also sets a 0% import tariff on certain gasoline imports until 31 December 2027. It extends a flex-fuel incentive to 30 April 2030. Both are aimed at private-sector supply, which the subsidy system had crowded out.

Why Now — the Dollar Shortage and the IMF

Bolivia’s fuel subsidies cost the state around US$55 million a week, paid for with dollars the central bank increasingly does not have. The country’s foreign-exchange shortage has made imported fuel — most of what Bolivia consumes — a direct drain on reserves.

The timing is not accidental. The decree came hours after the Senate approved a US$1.9 billion credit from the IMF on Friday. The Chamber of Deputies had approved it on Thursday. Officials say they expect the IMF board to vote on 2 October; treat that date as an expectation, not a confirmed schedule. Fuel-subsidy reform is exactly the kind of fiscal signal an IMF program looks for. The government has framed the decree as part of stabilizing public finances.

What It Means for Expats

The direct cost is easy to price: a 40-litre tank that cost Bs392 (about US$36) now costs Bs718, about US$65. For expats who drive, that is the whole change for now.

The indirect effects are the real story, and they are honestly unknown at the time of writing. Diesel moves Bolivia’s buses, trucks and farm machinery, so transport unions and food supply chains will feel the increase first. Transport unions had not announced fare changes as of Sunday; any verified figures will matter more than predictions. If you budget in bolivianos, watch bus fares and market prices over the next two weeks rather than assuming the worst on day one.

One structural point in the other direction: because the price now follows an international reference with a 5% band, it can also fall. The era of a price that only goes up by decree is, in principle, over.

The Background — Twenty Years of Cheap Fuel

Bolivia’s fuel subsidies date back more than two decades. They were a pillar of the economic model built under the MAS governments. They kept diesel among the cheapest in the Americas. But they came at the cost of ballooning fiscal spending, smuggling to neighbouring countries, and a refining and import structure dependent on state dollars.

President Rodrigo Paz won the runoff of 19 October 2025 with 54.5% of the vote and took office on 8 November 2025. He promised to phase out the subsidy era. The first cuts came in December 2025; the August and September decrees now repealed were interim steps. DS 5716 is the first measure that replaces the fixed-price system with a market-referenced band. It does so rather than simply raising the frozen number.

What Comes Next

Three things to watch: the ministry’s band regulation, due within five working days of the decree; the first daily recalculations of the reference price, which will show whether the band actually moves; and the expected IMF board vote around 2 October. Locally, the open question is transport fares — the first union announcements, if any, will set the tone for how the increase lands. The regional picture is in our daily guide for Sunday 20 September.

Earlier updates

Law 1765 is enacted: the IMF’s US$1.9 billion program for Bolivia is now domestic law, and officials say they expect a first disbursement of about US$250 million once the board signs off — the Fund has confirmed no schedule, though a board vote is expected around 2 October. Monday’s strike against the accompanying decree (DS 5716) was patchy; the COB assembly meets today to decide whether to extend it by 48 or 72 hours. The piece below remains as published.

The drivers’ ampliado in Santa Cruz rejected DS 5716 and demanded its abrogation on Tuesday, leaving the national-strike option open; Oruro’s drivers march today, and urban teachers have called a national march for Wednesday 30 September. The state of exception in force since 20 June — extended to 17 December — bans road blockades, and police and soldiers are guarding the main highways. Diesel now sells at Bs 17.95 a liter, about US$1.51 at the central bank’s official rate of roughly 11.9 bolivianos per dollar. The piece below remains as published.

More: Latin America news in English, every day from The Rio Times. See also our daily guide for Sunday 20 September.

Related coverage: our latam expat nomad daily guide for saturday.

Clarification — 21 September 2026: The US dollar conversions in this piece use the parallel market rate of around Bs11 per US dollar, the reference used in Bolivian press coverage of the decree. At the official rate of about Bs6.96 per US dollar, the new diesel price of Bs17.95 per liter equals about US$2.58. The piece below remains as published.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief