Bolivia declares energy and social emergency after widespread protests

Bolivia has declared an “energy and social emergency” over fuel shortages, rising inflation, and a lack of dollar reserves. The government will carry out exceptional measures for a year in order to guarantee fuel supply and reactivate the economy.  The announcement comes as center-right President Rodrigo Paz faces mounting economic and social turmoil just two months into his presidency. For the next year, any person or company will be exceptionally authorized to import and freely sell gasoline and related products to ensure supply in the country. They will be allowed to use international prices, following the recent removal of fuel subsidies. Diesel will also be removed from the list of controlled substances for a year. The temporary measures aim to “restore quality of life to Bolivians and guarantee the integral reconstruction of the Bolivian economy,” the decree with the new provisions said. Paz wrote on X that he sees economic stabilization as “only the first step” in his program.  “The true challenge is in building a sustainable and equal growth model that reaches all Bolivian families and translates into public works, healthcare, education and employment.” On Tuesday, the Inter-American Development bank announced it would provide Bolivia with US$4.5 billion as part of a 2026-2028 aid package, which was part of a stabilization agenda. The package includes special funding for social welfare, private investment, infrastructure, budget support and capital mobilization. Protests and roadblocks The emergency declaration comes after Bolivia was practically paralyzed for six days last week due to protests and roadblocks against an economic austerity package that Paz issued by decree in December. It eliminated fuel subsidies, gave special benefits to those planning large investments in local natural resources, and froze public workers’ salaries, among other measures. The decree was met with strong rejection by blue-collar workers, miners, farmers and teachers, among other working-class sectors, who saw it as a sharp shift from decades of left-wing policies. Critics said it benefitted large investors while harming those struggling to make ends meet amid rising inflation. On Tuesday Paz decided, together with Bolivia’s unions, to annul the decree. His decision led to the end of the protests and roadblocks. Paz agreed on a new decree with the unions, making several changes to the original but maintaining other aspects of it, like the elimination of fuel subsidies and a rise in payments for students and the elderly, as well as the minimum wage.  However, they left out a segment that allowed for quick approval of investment projects. The Bolivian state had been subsidizing fuel for the past 20 years, importing gasoline and other fuels at international prices and selling it at below-market rates on the domestic market. This ultimately drained the country’s dollar reserves and propelled annual inflation to over 20% in 2025. According to the Bolivian government, ending the subsidies allows the state to save up to US$10 million daily. The new prices mean Bolivians will now be paying 86-162% more. Warning for Argentine travelers Although the roadblocks and protests are over, the Argentine Foreign Ministry issued a statement on Tuesday recommending that Argentine nationals avoid travelling to La Paz in upcoming days, “considering that the situation remains unstable.” The ministry recommends that passengers whose trips to Bolivia are essential travel by plane, rather than overland. The foreign ministry also “emphatically” recommended purchasing travel insurance that covers disruption stemming from protests and similar events.