Bolivia withdraws fuel price increase after street protests

Jan 1, 2011, 10:51 GMT

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La Paz (dpa) - Bolivian President Ivo Morales late Friday repealed a hike in fuel prices that had sparked street protests similar to those five years ago that brought down the government of his predecessor Carlos Mesa.

At the time, Morales was leader of the opposition in the South American country.

On Thursday, just days after the government raised fuel prices by 83 per cent, at least 15 policemen were injured and 30 demonstrators arrested in violent street protests against the measure in the capital La Paz and cities.

Morales' plan to raise the minimum wage for employees in the health, military, education and police sectors by 20 per cent from the current 115 dollars a month to offset the price hikes did not prevent the mass protests.

In the central city of Cochabamba, four policemen were injured in clashes with students and other protestors demanding a repeal of the price increase.

In cities across the country, protestors damaged public and private buildings, including offices of organizations linked to Morales' Movement for Socialism party, and blocked roads.

Protestors in the western city of El Alto, demanded the resignation of Mayor Rene Patana for not speaking out against the fuel price increases, and marched to the capital to protest at the seat of government.

La Paz Mayor Luis Revilla, a former ally of Morales, led a protest march together with members of the progressive Movement Without Fear (MSM), another former ally of the president.

MSM leader Juan del Granado called on Morales to hold a referendum on fuel prices.

The protests are the strongest sign of dissent against the government of Morales in the past five years, as the rise of fuel prices has triggered food shortages, a run on bank savings, increases in the price of bread from 0.4 Bolivianos to 0.7 Bolivianos (6 US cents to 10 cents), and a hike in transport fares of between 50 and 100 per cent.

In a televised statement on Wednesday, Morales admitted that his decision would be hard on the economy and on families, but said it had been necessary to prevent petrol smuggling to neighbouring countries.

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