# Bolivia Ends Diesel Subsidies Hours After Congress Approves a $1.9 Billion IMF Programme

President Rodrigo Paz acted the same day the Senate ratified the three-year loan, and the country's main labour federation has threatened renewed protests.

- Published: 2026-09-19T05:10:02.674Z
- Canonical: https://polylog.news/2026-09-19/bolivia-ends-diesel-subsidies-hours-after-congress-approves
- Publisher: Polylog (Global desk)
- Section: macro
- Sources: [Al Jazeera](https://www.aljazeera.com/news/2026/9/19/bolivias-congress-approves-1-9bn-imf-loan-amid-protest-threats), [Dawn](https://www.dawn.com/news/2031027/pm-widens-fuel-subsidy-eases-weekly-limits), [Deutsche Welle](https://www.dw.com/en/cuba-faces-another-nationwide-blackout-amid-us-fuel-blockade/a-79335396)

Bolivia's Senate ratified a [$1.9 billion three-year loan agreement with the International Monetary Fund (IMF)](https://www.aljazeera.com/news/2026/9/19/bolivias-congress-approves-1-9bn-imf-loan-amid-protest-threats) on Friday, a day after the lower house approved it. Within hours President Rodrigo Paz ended subsidies on the diesel that powers the country's trucks, buses and tractors, and the price [rose from 9.80 to 17.95 bolivianos per litre, an increase of about 83%](https://www.bloomberg.com/news/articles/2026-09-19/bolivia-eliminates-diesel-subsidy-after-imf-loan-approval-mu7ydf34). Gasoline used by private cars stays subsidised for now.

The sequence is the point. Declining natural gas exports have left Bolivia without the dollars to import fuel, and selling that imported fuel below cost drained public finances further. The Bolivian Workers' Central, the main labour federation, opposes the programme and warns that the spending cuts will raise living costs. Fuel queues have been a feature of Bolivian life since 2023.

Congress also [extended for another 90 days the state of emergency](https://www.usnews.com/news/business/articles/2026-09-18/bolivias-congress-approves-1-9-billion-imf-deal-triggering-threats-of-unrest) that Paz had declared to clear roads during earlier protests, a measure that allows for military intervention and the suspension of some civil liberties. Weeks of road blockades in June and July had paralysed much of the country as protesters demanded Paz's resignation, and unions have threatened a repeat now that the diesel subsidy is gone.

Other governments are moving in the opposite direction. Pakistan's prime minister, Shehbaz Sharif, approved a [wider fuel relief scheme with a 500-rupee weekly discount that officials say reaches 24 million people](https://www.dawn.com/news/2031027/pm-widens-fuel-subsidy-eases-weekly-limits). Cuba, meanwhile, suffered [another nationwide blackout](https://www.dw.com/en/cuba-faces-another-nationwide-blackout-amid-us-fuel-blockade/a-79335396) as its grid failed under fuel shortages, ageing infrastructure and US sanctions.

Three countries, three responses to the same underlying condition: energy priced in dollars, revenues that are not.

## What this means

A fuel subsidy is fundamentally a monetary problem managed through fiscal policy. When a government prints money or borrows to sell imported fuel below cost, it converts a foreign-exchange shortage into domestic inflation, and the eventual adjustment arrives either as an IMF programme or as blackouts. Bolivian truckers, farmers and food prices bear the cost of the diesel decision directly. For bondholders, the Bolivian programme replaces immediate default risk with political risk, and the labour federation's response over the coming weeks will determine which risk the market ends up pricing.

## What to watch

- Whether the Bolivian Workers' Central calls road blockades, the tactic that has previously forced Bolivian governments to reverse fuel decisions.
- Bolivian diesel prices at the pump and the pass-through into food prices, the mechanism that turns a fiscal reform into a political crisis.
- Whether Pakistan's widened subsidy survives its own IMF programme review, since the two policies point in opposite directions.