Gas
Bolivia faces deepening energy crisis as gas reserves decline
Bolivia is grappling with severe fuel shortages and soaring inflation driven by years of declining natural gas reserves and underinvestment.
Key points
- Proven natural gas reserves have fallen to 3.7 trillion cubic feet as of April.
- The Congress approved a $1.9 billion IMF loan in September requiring strict austerity measures.
- Experts warn the country could become a net gas importer by around 2030.
What happened
Bolivia is confronting a severe energy crisis characterised by dwindling natural gas reserves, falling export volumes, and escalating fuel import costs, according to OilPrice.com. Decades of state control following policy shifts in 2006 directed fossil fuel revenues primarily toward social programmes and heavily subsidized domestic consumption rather than exploration and infrastructure maintenance. Consequently, gas production has dropped significantly over the past decade.
Proven reserves stand at roughly 3.7 trillion cubic feet as of April. With natural gas supplying approximately 70 per cent of the national electricity mix, the depletion of domestic fields has triggered widespread fuel shortages. Former economic association head Luis Fernando Romero told OilPrice.com that the country missed a crucial opportunity to leverage its past hydrocarbon wealth.
Why it matters
The economic fallout includes rising inflation, expensive imported goods, and heightened financial pressure on households. President Rodrigo Paz noted that global market conditions are compelling the administration to make difficult decisions. To stabilize the economy, the legislative branch approved a $1.9 billion financing package from the International Monetary Fund in September, which was cleared by the IMF Executive Board on October 2. The agreement mandates subsidy reductions and tighter public expenditure, raising concerns over potential social unrest following earlier protests against subsidy cuts and poor fuel quality.
Data from the World Bank indicates that Bolivia had an electricity access rate of 96.6 per cent and a renewable electricity generation share of 38.2 per cent in 2021. However, slow progress in developing alternative energy sources has left the economy vulnerable to fossil fuel supply shocks.
What comes next
The government has permitted private entities to import and distribute refined products to mitigate immediate shortages, while state hydrocarbon enterprises look to revive exploration. Nevertheless, analysts project that Bolivia might transition into a net importer of natural gas by 2030. Long-term recovery will likely necessitate economic diversification and greater investment in renewable energy infrastructure to secure domestic supply.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Gas is the flexible backbone of many grids and the designated transition fuel in many national plans, from LNG trade to domestic LPG and CNG. Supply security and pricing drive both power reliability and emissions.
64.6% of electricity in Bolivia came from gas in 2024Countries in this story
Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
