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Bolivian president seeks support for fuel price increase

By the CNN Wire Staff
A woman carries a sack of sugar from a store of the Bolivian state-run food company Emapa, in La Paz, on December 28, 2010.
A woman carries a sack of sugar from a store of the Bolivian state-run food company Emapa, in La Paz, on December 28, 2010.
STORY HIGHLIGHTS
  • NEW: "Of course it's difficult -- for the national economy, for the family," Morales tells Bolivians
  • NEW: Move will result in a stronger national economy, he says
  • Bolivia ended its subsidies of gasoline and diesel
  • The move increased some prices more than 80 percent

La Paz, Bolivia (CNN) -- President Evo Morales sought Wednesday to drum up support for his move over the weekend to end subsidies on the price of gasoline, a decision that resulted in the largest gas price increase in 30 years and led to protests in some cities.

"Of course it's difficult -- for the national economy, for the family," he said in a nationally televised address. But, he added, the decision will lead to a stronger country and cut down on contraband. "We're taking care of the national economy with this."

This year, the government will spend $660 million to import gasoline, of which the government will have subsidized $380 million, he said. Of that, $150 million worth of gasoline will have been sold for higher prices in neighboring countries, he said.

For example, under the old system, $27 worth of gasoline in Bolivia was worth $90 on the international market, he said. In response, owners of private cars, taxis and trucks equipped their vehicles with double tanks, filled them up in Bolivia and drove them across the border to sell the gasoline in Brazil, Argentina, Paraguay and Peru, he said.

"It's a loss," Morales said. "This is the economic lifeblood of the Bolivian people."

Supreme Decree 748 is intended to stop that and to give oil producers an incentive to invest in Bolivian petroleum production "so that Bolivia is not continuing to import either diesel or gasoline," he said.

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RELATED TOPICS
  • Bolivia
  • Evo Morales
  • Gas Prices

Morales said he would add 10 percent to the national price for staples like rice, corn and wheat to incentivize domestic food producers to grow more and would invest in water projects, too.

He added that he will increase by 20 percent the salaries of police, the armed forces and the health and education sectors.

The local media have dubbed the new policy as the "Gasolinazo," or "The Big Gasoline Hit."

A strike by bus and other public transportation drivers went as planned, though some remained on the job. Those who remained, however, raised their prices, too.

Journalists Martin Aristegui and Gloria Carrasco and CNN's Rafael Romo contributed to this report.

 
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