Key facts
- Bolivia faces a severe energy shortage due to dwindling natural gas reserves.
- Proven reserves stand at an estimated 3.7 trillion cubic feet as of April.
- Natural gas accounts for around 70% of Bolivia's electricity mix.
- The country approved a $1.9 billion IMF loan requiring austerity measures.
- The government has authorized private sector imports of refined fuels.
Bolivia is grappling with a deepening energy crisis driven by critically low natural gas reserves and years of underinvestment in its energy sector. The situation is compounded by rising global energy prices, partly attributed to the conflict in Iran. Former president Evo Morales's nationalization of the fossil fuel industry in 2006 led to significant revenue that was largely channeled into public spending and subsidies, masking the dwindling reserves for years. As of April, Bolivia holds an estimated 3.7 trillion cubic feet of proven reserves, a figure that has led to a nearly 60% drop in exports over the past decade. Natural gas remains central to the country's energy mix, powering around 70% of its electricity, while efforts to develop green energy have lagged. The economic fallout includes soaring inflation and unaffordable imported goods, prompting the government to seek external financing. In September, Congress approved a $1.9 billion loan from the IMF, which mandates austerity measures including cuts to fuel subsidies and public spending. The IMF's Executive Board approved the loan on October 2, with further financing expected from the World Bank and other lenders. These measures have already led to increased fuel prices and are anticipated to result in the scrapping of further gasoline subsidies, potentially fueling social unrest as seen in previous subsidy reductions and poor-quality gasoline distribution incidents.