Bolivia Ends Diesel Subsidy, Secures IMF Loan

Bolivia’s Congress has approved a $1.9 billion loan agreement with the International Monetary Fund as the government seeks external financing and policy support. The IMF program still requires approval from the IMF’s executive board before any funds can be disbursed, meaning the financing is not yet available to the treasury.

Economy Minister Christian Morales told senators the agreement is expected to bolster confidence among other international lenders. He said the government aims to secure about $5 billion in additional financing from institutions such as the World Bank and the Inter-American Development Bank, using the IMF deal as an anchor.

Alongside the loan approval, President Rodrigo Paz announced an immediate end to subsidies for diesel used by trucks, buses and tractors. The government stated that diesel will now be sold at international prices, marking a significant shift in the country’s fuel pricing policy.

Officials indicated that gasoline, used mainly by private cars, will remain subsidized for now. This creates a differentiated approach between diesel, which is heavily used in transport and productive sectors, and gasoline, which is largely consumed by private motorists.

To cushion the impact of higher diesel costs, President Paz announced about $79 million in cash assistance targeted at 2.9 million Bolivians. The government framed this as direct support meant to help vulnerable groups absorb the immediate rise in fuel-related expenses.

In addition to cash transfers, the authorities pledged loans on preferential terms for truckers, small businesses and producers. These facilities are intended to help sectors most exposed to diesel prices manage operating costs during the transition to market-based fuel pricing.

Congress extended for another 90 days a state of emergency that had been declared by the president. Reporting on the measure describes it as allowing for military intervention and the suspension of some civil liberties during the period it remains in force.

The policy package has triggered strong pushback from organized labor. The Bolivian Workers’ Central and other unions voiced fierce opposition to both the IMF loan arrangement and the removal of fuel subsidies. Union leaders have warned of renewed protests and potential road blockades in response to the government’s decisions.