January 1, 2011 in Nation/World

Morales reverses gas price increase

Associated Press
 

LA PAZ, Bolivia – Bolivian President Evo Morales on Friday abruptly canceled a decree that sharply raised fuel prices, reacting to widespread protests.

Sunday’s price hikes had caused a burst of street protests, many of them from groups that are core supporters of the leftist leader who took office five years ago as Bolivia’s first indigenous president.

Morales said that he had listened to unions and social groups and decided “it is not the time” for the price rise.

The government announced Sunday that it was raising gasoline prices by 73 percent, to $3.48 a gallon for regular gasoline.

The price had been frozen for six years, and Vice President Alvaro Garcia said the state was paying $380 million a year to subsidize gasoline imports, though much of it was being smuggled to neighboring countries with higher prices.

The sudden rise prompted strikes by bus and taxi drivers that hobbled transit in many cities, and mass street protests on Thursday turned violent. At least 15 people were reported injured.

Morales’ government at first tried to mitigate the blow of the higher prices by announcing a 20 percent salary increase for public workers and help for rice, corn and wheat farmers.

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