Edict raises prices of gasoline/diesel in Bolivia

Fuel price surge prompts strike call in Bolivia:

Well, it had to happen sooner or later. Gasoline and diesel prices had been frozen for most of 10 years here, subsidized at about $2.00 /gallon for standard grade gasoline. The prices were so much less than in neighboring countries that smugglers were making a killing selling even in small quantities to our neighbors on every side. The government admitted that it was nearly impossible to stop the "mom and pop" smugglers who used bicycles, donkeys and llamas to haul gasoline to our neighbors. [How's that for being ecologically correct in your smuggling, eh?]

While it is a pity to see prices go up for fuel, it had to happen. You can only maintain a price differential with respect to the rest of the world for so long. And ten years is a long time. As the vice president said, when prices were fixed nearly 10 years ago the price of crude was about $27 (remember those days?) The low prices also have the effect of discouraging exploration for more crude in Bolivia. So with a the increase in prices at the pump it is expected that there will be more exploration and production nationally. As it is we have to import much of the diesel, kinda weird for a hydrocarbon producing country....

There will be the predictable protests. The folks that will feel the worst of this are those at the bottom of the ladder economically. As the price of gasoline/diesel ripples through the economy the price of public transportation and most products will rise. Frankly it was overdue, but even so it will be hard on a lot of people.

We rack up about 100km of car use per week, or about 10-12 liters of fuel (it is a Honda) per week. Round trip for Barb to get to school and back is about 12 km. At the new prices that will be about Bs 40-50 per week or maybe $7 of additional expense. I primarily use public transportation and spend about $1 a day to get to/from downtown. Most probably the price of public transportation will go up. However since many of the trufis (mini-vans tricked out with benches) use natural gas and since the price of gas is frozen in the new edict, there is the hope that public transportation prices won't go up much.