Bolivia's Deepening Energy Crisis: Natural Gas Reserves Dwindle Amid IMF-Backed Austerity

Bolivia faces a severe energy and economic crisis driven by declining natural gas production and reserves, compounded by years of underinvestment and reliance on fossil fuel revenues. Proven reserves stand at approximately 3.7 trillion cubic feet as of April 2026, with production having halved since 2014, turning the country into a net importer of diesel and petrol. Exports have fallen nearly 60% over the past decade, exacerbating foreign currency shortages. The IMF Executive Board approved a 36-month, $1.9 billion Extended Fund Facility arrangement on October 2, 2026, following congressional approval in September. This unlocks potential additional financing of up to $4 billion from the World Bank and others, but requires subsidy cuts, fiscal austerity, and reforms including an automatic fuel pricing mechanism. Fuel subsidies have already been reduced, with gasoline subsidies slated for elimination by early 2027, sparking protests and raising living costs. Natural gas still accounts for about 70% of electricity generation. The crisis echoes patterns in other resource-dependent economies, highlighting the need for diversification into renewables and other sectors. President Rodrigo Paz has noted the difficult choices imposed by global prices, influenced by conflicts in the Middle East.