After the removal of the diesel subsidy, the Bolivian government repealed the incentive for aviation fuels

The FAB002, a Dassault Falcon 50EX, is an aircraft of the Military Air Force designated for presidential use. The government of Bolivia on Wednesday revoked the subsidy on aviation gasoline and ordered that the fuel be sold at international prices, as part of the adjustment to the hydrocarbons system that has already sparked protests following the diesel price increase. The decree, signed by President Rodrigo Paz, established "the conditions for the importation and commercialization of grade 100 aviation gasoline, with the purpose of guaranteeing the supply of fuels in the domestic market." The measure eliminates the regulated price of about USD 0.90 per liter that had applied to that fuel. From now on, aviation gasoline will be sold at market prices. The decision is part of the Executive's economic reforms to respond to the crisis that the Government describes as the worst in 40 years. The Paz administration attributes a central part of the state deficit to the fuel subsidy scheme. Two weeks ago, the Government removed 100% of the diesel subsidy. The price of that product will now depend on international quotations. Gasoline will keep its subsidy until the end of this year, and the Executive plans to introduce new measures in January. A sign announces that there is no gasoline at a service station in La Paz, Bolivia, on Monday, August 17, 2026 (AP/Juan Karita)The diesel price increase triggered complaints, especially among freight carriers. According to official figures, 20% of transport uses diesel, and the increase has already affected food prices. Bolivia imports 80% of the diesel and 50% of the gasoline it consumes. The Government said it seeks to put public accounts in order and redirect resources previously allocated to subsidies toward state infrastructure projects. Transporters, merchants, and teachers expressed their rejection of the measures. Paz also announced that he will send a bill on electricity to the Legislative Assembly, which seeks to gradually reduce dependence on gas for power generation and promote non-conventional renewable sources. This is the second legislative initiative the Government has sent to Congress. In August it presented an investment bill, included in the package of measures to tackle the economic crisis, which has not yet received legislative approval. "There is energy here, there is gas, we have electricity, we have the capacity to provide energy so that your companies can set up here and thereby generate employment, generate development at all levels," the president said. The head of state's administration had declared the reorganization, dissolution, or liquidation of deficit-ridden state companies under central Executive control "a priority" last week, after identifying 15 companies in technical bankruptcy with accumulated losses of about USD 381 million. The President of Bolivia, Rodrigo Paz, addresses the 81st United Nations General Assembly at UN headquarters in New York, on September 24, 2026 (ANGELA WEISS/AFP)The measure was established in a decree that ordered an individual evaluation of each company. The Technical Office for the Strengthening of Public Enterprises (OFEP) will prepare the assessments, which must then receive approval from the Strategic Superior Council of Public Enterprises (Coseep). When the opinion establishes the need for a reorganization, the responsible ministry will have 15 business days to begin the corresponding procedures. The decree does not detail the number or names of the companies that will undergo that review. Two weeks earlier, the Minister of Economy and Public Finance, Christian Morales, had anticipated that the evaluation would cover between eight and ten institutions. In April, the Executive reported that 15 of the country's 67 state companies were in technical bankruptcy, with accumulated losses of 2.655 billion bolivianos, equivalent to about USD 381 million. Most of those companies were created during the governments of Evo Morales, between 2006 and 2019, and Luis Arce, between 2020 and 2025. Those administrations promoted the expansion of public enterprises as part of a policy to strengthen national production and substitute imports. (With information from Associated Press and EFE)