Bolivia president removes fuel subsidies

Bolivian President Rodrigo Paz who was elected last month said on Wednesday that his government will remove the 'long-standing' fuel subsidies to help shore up the public finances.

In a national address, he stated: "This doesn't mean abandonment by the government, it means order, Justice; Redistribution which is real, clear, and transparent."

Paz stated that the details would be outlined in a future government decree. However, they appeared to apply to the agricultural and business sectors immediately, which the president had previously indicated he would first target.

Paz?also stated that he 'would open the doors to allowing direct imports of diesel, since state-run oil firm YPFB struggles to secure supplies.

Fuel prices were frozen in Bolivia for 2006. A liter of premium gasoline cost 3.74 bolivianos and a litre of diesel was 3.72?bolivianos. Diesel now costs 9.80 bolivianos for a?liter, and premium gasoline will cost 6.96.

Mauricio?Medinaceli, Minister of Oil and?Gas, said that prices will be set for six months. However he didn't rule out any further alterations.

Has inherited an economic in turmoil

The country faces difficult negotiations in the 'legislature for reforms that economists claim are necessary to stabilize the nation's finances.

(source: Reuters)