The Queues Are Gone — At a Price
The days-long lines for gasoline in Bolivia are over. Fuel is available at every station, truckers move freely, and the black market for diesel has largely collapsed. The price of that normality: gasoline now costs Bs 6.96 per liter and diesel Bs 9.80 — roughly 80% more than before President Rodrigo Paz eliminated two decades of fuel subsidies on December 17. Bolivia economic reform, the most aggressive in a generation, is delivering visible results and imposing visible costs simultaneously. This is part of The Rio Times’ comprehensive coverage of Latin American financial markets and economic developments.
The impact on household budgets has been real but less catastrophic than feared. January inflation hit 1.31% — the sharpest monthly spike in years, driven directly by fuel — but February reversed course dramatically, registering a 0.62% decline. A poll by IPSOS-Ciesmori for broadcaster Unitel found that 78% of Bolivians supported removing the subsidies, a remarkable figure given the pain involved.
Bolivia Economic Reform: The Numbers So Far
Paz inherited a country in genuine crisis. International reserves were nearly exhausted, dollars were scarce, multiple exchange rates coexisted, and the state oil company YPFB lacked funds to import fuel the country no longer produces domestically. The subsidy alone consumed over $2 billion annually. His flagship Decree 5503, signed five weeks after taking office on November 8, declared a state of economic, financial, energy, and social emergency.
The early fiscal math is striking. The government saved over $400 million in the first 45 days after ending subsidies, roughly $10 million per day. Diesel consumption dropped 50% overnight — from 50,000 to 25,000 barrels daily — revealing the scale of smuggling to neighboring countries that the subsidized prices had enabled. January produced a fiscal surplus exceeding Bs 3 billion. International creditors have committed over $8 billion in credit lines, and the country’s risk premium has begun to fall.
Governing Without a Legislature
The paradox of Paz’s first 100 days is that the stabilization has been achieved almost entirely through executive decrees — 60 in total, the lowest count for any Bolivian president in 30 years, but sufficient to restructure the economy’s foundations. The Plurinational Legislative Assembly, still dominated by factions of the Movement Toward Socialism (MAS) loyal to either Evo Morales or former president Luis Arce, has proven unwilling or unable to process the structural reforms Paz’s team has drafted.
The laws that remain stalled matter enormously: investment protection, mining reform, a new hydrocarbons framework, and energy sector modernization. Without legislative backing, Paz can manage emergencies but cannot build the legal architecture for a new economic model. Analyst Gabriel Arias noted that Paz has handled the immediate crisis competently but acknowledged that the absence of structural legislation remains the administration’s most significant vulnerability.
A Social Cushion, For Now
To soften the blow, Paz raised the minimum wage 20% to Bs 3,300 ($474), increased the elderly pension (Renta Dignidad) to Bs 500, and created a new quarterly cash transfer of Bs 200 for parents without social security contributions. Bolivia closed 2025 with inflation near 20.4%, and ECLAC projects GDP growth of just 0.5% for 2026. Whether the fragile stability holds depends on whether Paz can convert decrees into laws — and whether a hostile parliament lets him try. As a paint vendor in a working-class La Paz neighborhood told the Associated Press: everything has gone up, but less than under the previous government.