Bolivia Blames IMF as Diesel Subsidy Cut Sparks Roadblocks
Bolivia · ENERGY
Key Facts
- —Decree Supreme Decree 5683 lifted the Treasury ceiling for fuel imports on 27 August.
- —Amount The ceiling doubled from Bs1 billion to Bs2 billion, about US$168 million.
- —Central bank Bolivia’s central bank plans to drain Bs13.736 billion in late 2026.
- —Prices The Bolivia diesel subsidy now splits buyers at Bs18 and Bs9.80.
- —Currency The official rate was Bs11.93 per dollar on 28 August 2026.
A pricing decree, a cleared roadblock and two fresh money measures collide in one week.
Bolivia’s government has told mayors that the partial Bolivia diesel subsidy withdrawal was a condition set by the International Monetary Fund. Hours later, police and soldiers cleared a farmers’ roadblock in Beni, and at least five people were hurt.
What the government told the mayors
Fernando Aramayo, Minister of the Presidency, spoke on 27 August at a meeting with mayors in La Paz. He said Supreme Decree 5676 is one of the conditions Bolivia has from the International Monetary Fund.
Aramayo argued the state cannot keep financing a budget line that he said carried heavy corruption and drained the Treasury. The remark turned a technical pricing rule into a political fight over the Bolivia diesel subsidy.
President Rodrigo Paz attended the same meeting and defended the measure in blunt terms. He said the decree can be improved, but there can be no going back.
Johnny Torres, president of the Federation of Municipal Associations, known as FAM, asked unanimously for repeal. Paz replied that reversing it would take money away from the municipalities themselves.
Where the IMF programme actually stands
The International Monetary Fund, or IMF, and Bolivia reached a staff-level agreement on 29 July. It covers about US$1.9 billion over 36 months under an Extended Fund Facility.
Nothing has been paid out yet. The deal still needs the IMF Executive Board and Bolivia’s Congress, where the governing coalition lacks a majority.
The Fund’s published staff statement on that agreement does not name diesel or fuel subsidies. Its mission chief, Joana Pereira, described a reform plan launched by the new administration.
The IMF has not publicly answered Aramayo, so the claim that the decree is a formal condition remains unconfirmed. The programme documents that would settle the point are not yet public.
The roadblock at San Pablo bridge
Producers from Marbán province in Beni blocked the San Pablo bridge from the morning of 26 August. Their single demand was repeal of the decree behind the Bolivia diesel subsidy split.
Police and armed forces cleared the crossing on the afternoon of 27 August, roughly 140 kilometres east of Trinidad. Traffic between Trinidad and Santa Cruz was restored that evening.
Bolivian outlets reported at least five people hurt and a similar number detained, citing preliminary accounts. No consolidated official casualty count has been published, so those figures remain unconfirmed.
A colonel commanding the regional operation said the road had been reopened to vehicles. Protesters briefly returned to the site before the route was secured again.
Doubling the money that pays for imports
Supreme Decree 5683 appeared in the Official Gazette on 27 August. It doubles the ceiling on Treasury money that can flow to the state oil company.
That company is Yacimientos Petrolíferos Fiscales Bolivianos, or YPFB, the state hydrocarbons firm. The ceiling rises from Bs1 billion (US$84 million) to Bs2 billion (US$168 million).
The money covers the gap between what imported fuel costs and the regulated pre-terminal price. It amends Decree 5652 of 9 July, and is an exceptional authorisation rather than a standing fund.
Economy Minister Christian Morales and Hydrocarbons Minister Marcelo Blanco must carry it out. Morales was sworn in on 25 August, replacing José Gabriel Espinoza.
The hole the state company is carrying
YPFB president Sebastián Daroca said in late August that the present gap is unsustainable for the firm. Imported diesel lands at roughly Bs15 (US$1.26) a litre before tax.
With value-added and transaction taxes the landed cost reaches about Bs18 (US$1.51) a litre. YPFB nets roughly Bs9.36 (US$0.78) from each subsidised litre sold at the pump.
Daroca put the monthly diesel shortfall near Bs1 billion (US$84 million) and the petrol shortfall near Bs700 million (US$59 million). On those numbers the doubled ceiling covers about two months of the diesel gap.
He blamed higher international prices rather than a shortage of dollars for imports. Queues at service stations have persisted through August across several cities.
What buyers actually pay at the pump
Decree 5676 was signed on 16 August and announced the following day. It set a reference price of Bs18 (US$1.51) a litre for large diesel buyers.
Everyone else keeps the frozen price of Bs9.80 (US$0.82) a litre. Petrol stays at Bs6.96 (US$0.58) a litre for all users.
Three bands define a large buyer by monthly volume. Direct users take 120 to 5,000 litres, direct clients 5,000 to 19,999, and GRACOS above 20,000.
GRACOS is the tax agency’s label for large taxpayers. Farm groups argue the bands catch ordinary mechanised producers, not only mines and heavy industry.
Why the central bank is draining cash
The Banco Central de Bolivia, or BCB, is the country’s central bank. Its Modified Monetary Programme, dated 10 July, sets out how much money it intends to withdraw.
The document projects monetary regulation of minus Bs13.736 billion (US$1.15 billion) in the second half of 2026. That follows minus Bs8.974 billion (US$752 million) already executed in the first half.
Draining cash means the BCB sells its own bills and bonds to banks and savers. Buyers hand over bolivianos, which leave circulation, so less money chases the same goods.
The stated aim is slower price growth and a steadier currency. The programme was rewritten because exchange rate unification changed how foreign currency holdings are valued.
The exchange rate expatriates should watch
The BCB official rate on 28 August 2026 was Bs11.93 to sell a dollar and Bs11.83 to buy one. Every boliviano figure here is converted at that official selling rate.
The parallel rate matters more in daily life, because that is where importers and savers really trade. Peer-to-peer platforms averaged about Bs12.01 to sell and Bs12.05 to buy the same day.
The gap is now under two percent, far narrower than the spreads seen before unification. That convergence is the clearest evidence the currency reform has taken hold.
For anyone with money in the country, two prices tell the story. Watch the parallel rate and the fuel queue to judge whether the Bolivia diesel subsidy retreat holds.
Frequently Asked Questions
Did the IMF order Bolivia to cut the diesel subsidy?
The Minister of the Presidency says so. The IMF has not confirmed it, and its published staff statement on the Bolivia diesel subsidy programme does not name fuel.
How much does diesel cost in Bolivia now?
Large buyers pay a reference Bs18 (US$1.51) a litre. Everyone else still pays Bs9.80 (US$0.82), the two-tier core of the Bolivia diesel subsidy rules.
What does the central bank measure mean for prices?
The BCB plans to pull Bs13.736 billion (US$1.15 billion) from circulation. Less cash should slow inflation, which shapes how costly the Bolivia diesel subsidy becomes.
Connected Coverage
Bolivia Fuel Debt Hits US$800 Million as IMF Money Waits
Bolivia Swears In New Economy Minister as YPFB Owes US$1.056bn to Traders
Sources
- www.infobae.com
- www.erbol.com.bo
- www.opinion.com.bo
- eju.tv
- www.bcb.gob.bo
- www.bcb.gob.bo
- eldeber.com.bo
- www.panamericana.bo
- erbol.com.bo
- www.imf.org
- www.infobae.com
- dolarbolivia.net
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