Bolivian workers face doubled fuel costs following a presidential decree that repealed long-standing state subsidies, pushing many to abandon fossil fuel-powered vehicles. Simón Huanca, a 53-year-old Indigenous artisan, imported a Chinese electric car to mitigate expenses for his family and weaving workshop, stating, “Since last year, I’ve been trying to get an electric car to save on costs.” This individual adaptation comes as the state shifts the burden of energy costs directly onto the populace, while simultaneously creating new market opportunities for importers and affluent buyers.
The Cost to Labor
The repeal of fuel subsidies in December, less than one year ago, by President Rodrigo Paz, effectively doubled the cost of gasoline, severely impacting Bolivians. This policy shift followed a period of worsening energy supply disruptions in 2023, the third year of such issues under then President Luis Arce. During Arce’s administration, the state maintained a subsidy, purchasing fuel at international prices and selling it domestically at half its value. This subsidy represented an annual drain of more than $2 billion on state funds, as Bolivia imports 80% of its diesel and 55% of its gasoline, gradually depleting its foreign currency reserves. Long lines at gas stations became a common sight as the state struggled to finance its energy imports.
Weeks after the subsidy repeal, transport operators reported that the poor quality of gasoline was damaging their vehicles. The government, under President Paz, alleged sabotage, claiming the gasoline distributed by state-owned oil company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) was contaminated with gum and manganese from storage tanks dating back to the Arce administration. This “junk gasoline” scandal ignited a wave of strikes and protests among transportation workers, leading to the resignations of two high-ranking officials at the state-owned oil company. The fear of further fuel price increases, exacerbated by the Iran war, served as a final catalyst for some, like 54-year-old lawyer Ever Vera, who invested over $36,000 in an electric vehicle to avoid “wasting valuable working hours searching for fuel or managing vehicle repairs.”
New Markets for the Affluent
The number of electric vehicles in Bolivia has surged from 500 to 3,352 in the last five years, with the most significant increase occurring over the last two years, coinciding with the fuel crisis. These vehicles, predominantly imported from China and the United States, still represent a tiny fraction of the estimated 2.6 million vehicles in the country. Freddy Koch, an electromobility expert with Swisscontact, noted that while the growth is “exponential,” these vehicles are primarily being purchased by “more affluent buyers.” He anticipates the total number could triple in two to three years, indicating a deepening market for those with accumulated capital.
State Policy Serves Capital
President Paz’s administration further facilitated this market expansion by eliminating import tariffs on all types of automobiles. This policy has multiplied the number of importers, intensifying competition to bring electric vehicles into Bolivia at a lower cost, primarily benefiting those with the means to purchase new vehicles and the capital to engage in import operations. This shift has also created new opportunities for electricians like 38-year-old Marcelo Laura, who identified a “lucrative niche” in installing residential and commercial charging stations due to the scarcity of public infrastructure. Laura observed, “A year ago, I thought it was practically impossible to think that people would actually be bringing in electric cars,” highlighting the rapid market transformation driven by state policy and economic pressure on the working class.