Bolivia president removes fuel subsidies

By Daniel Ramos

LA PAZ, Dec 17 (Reuters) – Bolivian President Rodrigo Paz, who took office last month, on Wednesday said his government would remove long-standing fuel subsidies in a bid to shore up public accounts.

“This does not mean abandonment (by the government), it means order, justice; redistribution that’s real, clear and transparent,” he said in a nationwide address.

While Paz said the details of the move would be laid out in a pending government decree, they appeared to apply immediately to the agriculture and business sectors, which the president previously said he would target first.

Paz also said he would open the door to allowing direct diesel imports, as state-run oil company YPFB has struggled to secure supply.

Bolivia froze fuel prices in 2006, with a liter of diesel costing 3.72 bolivianos ($0.5431) and premium gasoline at 3.74 bolivianos. Diesel will now cost 9.80 bolivianos per liter and premium will cost 6.96 bolivianos per liter.

Oil and Gas Minister Mauricio Medinaceli said prices would be fixed for six months, though he did not rule out further adjustments.

Paz has inherited an economy in turmoil and faces tricky negotiations in the legislature to pass reforms that economists say are needed to stabilize the country’s finances.

($1 = 6.8500 bolivianos)

(Reporting by Daniel Ramos; Writing by Kylie Madry; Editing by Jacqueline Wong and Thomas Derpinghaus)