Bolivia’s Congress Backs an IMF Rescue That Will End Its Cheap Fuel
Key Facts
Bolivia has run short of dollars and fuel for three years, in its worst economic crisis in four decades. This week its Congress approved a US$1.9 billion IMF loan whose price is the end of cheap fuel.
Bolivia’s Chamber of Deputies, the lower house, approved the International Monetary Fund credit on Thursday 17 September 2026. The Senate sanctioned it a day later and sent it to President Rodrigo Paz for promulgation.
Why This Matters
Bolivia, a landlocked Andean country, is living through its worst economic crisis in 40 years, Al Jazeera reported. Natural gas exports, which used to bring in dollars, have declined for years.
Fewer dollars meant Bolivia could not pay for imported petrol and diesel, and fuel shortages have persisted since 2023. The state still sold that imported fuel at subsidised prices, draining public finances, the Associated Press reported.
Rodrigo Paz, a pro-business conservative, took office on 8 November 2025 after nearly two decades of socialist rule. The previous governments belonged to the MAS, the Movement for Socialism party of former president Evo Morales.
Paz promised fiscal discipline and an end to Bolivia’s isolation, according to Al Jazeera. For ordinary Bolivians, the most visible cost is fuel, because the deal ends the subsidy that kept pump prices low.
Why It Matters Beyond Bolivia
Brazil has a direct interest in a stable Bolivia, its western neighbour. The Gasbol pipeline has carried Bolivian gas into Brazil since 1999, passing through São Paulo state.
Since 2025 the same pipeline has also carried Argentine gas into Brazil, according to Global Energy Monitor. Bolivia is also the world’s third-largest coca producer after Colombia and Peru, InSight Crime reports.
Brazil is both a destination and a transit route for that cocaine, according to the same research group. That is why a warning about Brazilian gangs recruiting in Bolivia, made on vote day, matters to Brazil.
What Congress Approved
The lower-house vote came after a session that ran for more than five hours, according to Infobae. Deputies approved the bill in general and in detail, by more than two thirds, with no vote count published.
Chamber president Roberto Castro said the text was sent to the Senate for constitutional review. The Senate sanctioned the law on Friday 18 September and sent it to the executive, Infobae and La Razón reported.
Economy Minister Christian Morales told deputies the money would strengthen international reserves. He described the accord as sovereign and said it carried no imposition on Bolivia.
The bill itself runs to a single article, approving the loan and assigning repayment to the treasury. Opposition deputy José Luis Porcel said the proposal ran to seven pages with incomplete annexes.
Deputy Sandra Rivero pressed the government on subsidy removal, salary policy and bank interest rates. Foreign loans in Bolivia need a law passed by both chambers before the president can promulgate it.
The Shape of the IMF Programme
The staff-level agreement, a deal between the government and IMF officials, was announced on 29 July 2026. It falls under the Extended Fund Facility, the IMF’s medium-term lending line, and covers 36 months.
Infobae reports the credit is set at 1,369 million special drawing rights, the IMF’s own reserve unit. That equals about US$1.9 billion, disbursed in stages over the three years.
Each disbursement is repayable over ten years, with amortisation starting after four and a half years. The basic rate is 3.479 per cent, and surcharges, commissions and a service charge apply on top.
Bolivian officials say the programme should unlock a further US$5 billion from other multilateral lenders. That figure has not been confirmed by the lenders themselves.
Infobae also reports a target of cutting the fiscal deficit and lifting reserves by 2031. Those medium-term numbers come from the government, and the IMF board has not yet approved the programme.
What Bolivia Agreed To Do
A summary of the memorandum published by the Bolivian news site eju.tv lists the main commitments. It says the 2027 budget must contain no fuel subsidies, with prices moving to cost recovery.
It also describes fiscal consolidation, meaning deficit cuts, of about 8.5 per cent of GDP between 2026 and 2029. The central bank is to provide no new net financing to the non-financial public sector.
The exchange rate is to stay market determined, with intervention only in disorderly conditions. A minimum floor for social spending and a unified social registry are also listed.
Paz and the Fuel Subsidy
President Paz confirmed in mid-September that his government is working to end the fuel subsidy. In April, then economy minister Gabriel Espinoza put this year’s fuel import budget near Bs 14,000 million (about US$1.4 billion).
That was about US$2.0 billion at the old fixed rate of Bs 6.96, and about US$1.4 billion at today’s. Today’s reference is the central bank’s official rate of Bs 10.01 per dollar for Friday 18 September 2026.
Bakers and bus drivers in La Paz have warned that full removal would push prices higher. The government says basic utility tariffs will not rise because of the IMF accord.
Paz has said external money will not be used to pay for the fuel subsidy. His government has also opened fuel imports to private operators, a change still being applied.
The Dollar, Reserves and Prices
Bolivia ended a fixed rate of Bs 6.96 to the dollar in June 2026. The first flexible official rate was Bs 9.73, effective Monday 29 June.
The official rate reached Bs 12.64 on 9 September, then eased back. It was Bs 9.83 on Thursday and Bs 10.01 on Friday, the central bank said.
Central bank figures show gross reserves of US$4.29 billion at the end of August 2026. Net international reserves stood at US$4.14 billion, against US$2.01 billion a year earlier.
Gold accounted for US$3.48 billion of the gross total, and foreign currency for US$745.1 million. INE, the national statistics institute, put August inflation at 1.10 per cent and 12-month inflation at 5.02 per cent.
The Opposition to the Deal
The Bolivian Workers’ Central, known as COB and the country’s main labour federation, opposes the loan. It and other unions warn that spending cuts will raise living costs for struggling families, the Associated Press reported.
Weeks of road blockades in June and July already paralysed the country, with protesters demanding Paz’s resignation. The government answers that the loan is sovereign and that social spending has a protected floor.
The Security Warning
Government Minister Marco Antonio Oviedo, who runs internal security, spoke to the Legislative Assembly on 17 September 2026. He said the PCC and Comando Vermelho, Brazil’s two largest criminal groups, had begun recruiting Bolivian citizens.
The PCC, or First Capital Command, was founded in São Paulo prisons in 1993, according to InSight Crime. The Comando Vermelho, meaning Red Command, is based in Rio de Janeiro and dates from 1979.
Oviedo named Pando, San Matías and San Ignacio de Velasco among the affected areas. He also said a faction of the PCC was charging tolls and taking roads in Santa Rosa, in Pando.
These are statements by a minister, and the reports of them carry no documents or images. Santa Cruz governor Juan Pablo Velasco had raised youth recruitment the day before, Fides reported.
The assembly then extended the state of exception, an emergency regime, by 90 days with 100 votes in favour. The United States designated both Brazilian groups as terrorist organisations in May 2026, a separate matter.
Paz swore in General Germán Leonardo Rodrigo Mendizábal on the same day. He becomes permanent secretary general of the Supreme Defence Council, known as Cosdep.
The president asked him to draft a security and defence law. Paz said Bolivia faces narcoterrorism and must defeat it to develop.
Chile’s President Is Due in October
Chile’s consul general in Bolivia, Roberto Ruiz, said Chilean President José Antonio Kast will visit in October. He spoke on 17 September, at the reception for Chile’s national day.
The agenda covers electricity links, mining, digital connectivity and police cooperation, Visión 360 reported. The two countries have had no full diplomatic relations since 1978, only consular ties.
Bolivia lost its Pacific coastline in the War of the Pacific and still seeks sovereign access. The International Court of Justice ruled in 2018 that Chile has no duty to negotiate it.
What It Means If You Live or Invest in Bolivia
Fuel prices are the clearest near-term risk to household and transport costs. The memorandum points to cost recovery from January 2027, so plan for higher pump prices.
Importers should watch the official rate daily, because it has moved sharply since June. Contracts written in bolivianos now carry visible currency risk over even short periods.
Once the IMF board approves, disbursements and other multilateral money may follow. If the board delays, the government’s external funding plan for 2027 becomes harder to finance.
Brazilian firms buying Bolivian gas or trading across the border should watch for protests and road blockades. Salaried residents paid in bolivianos carry the currency move directly in their purchasing power.
What Is Not Yet Known
No date has been announced for the IMF board vote on the arrangement. It is not known when President Paz will promulgate the law.
The full text of the memorandum has not been published in English. Officials have not said how fuel prices will be phased up during 2027.
No evidence has been made public for the recruitment claims made on 17 September. Chile and Bolivia have not confirmed a date or a venue for the Kast visit.
More: Bolivia news in English, every day from The Rio Times.
Frequently Asked Questions
Why does Bolivia’s IMF loan matter?
Bolivia is in its worst economic crisis in about 40 years, short of dollars and fuel. The loan is meant to stabilise it, but it ends cheap subsidised fuel.
Has the loan been approved?
Bolivia’s lower house approved it on 17 September 2026 and the Senate on 18 September. The IMF board must still approve it before money is paid.
What happens to fuel prices?
The memorandum says the 2027 budget carries no fuel subsidy. Prices are meant to reach cost recovery.
Are the gang recruitment claims proven?
They are statements by Bolivia’s government minister on 17 September 2026. No supporting evidence was published with them.
Sources: Los Tiempos, Deputies approve the IMF credit by more than two thirds, Infobae, Chamber of Deputies gives the IMF accord its first passage, Infobae, the Senate sanctions the IMF accord, La Razón, Senate sanctions the IMF credit and closes the legislative process, Associated Press via Local 10, Congress approves the IMF deal amid threats of unrest, Al Jazeera, Paz sworn in as Bolivia’s president, IMF, staff-level agreement with Bolivia on an Extended Fund Facility, eju.tv, the keys to the Bolivia-IMF accord and what the government must do, Global Energy Monitor, the Gasbol pipeline, InSight Crime, Bolivia profile, InSight Crime, First Capital Command profile, Wikipedia, Comando Vermelho, Banco Central de Bolivia, net international reserves by component, INE Bolivia, consumer price index for August 2026, Noticias Fides, government minister on Brazilian groups recruiting young Bolivians, Vision 360, Kast to visit Bolivia in October, Vision 360, official dollar rate back above Bs 10 on Friday
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
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