Tag: Bolivia

Bolivia may have the second largest gas reserves in Latin America but it also has an acute shortage of diesel. People have blamed a variety of causes: smugglers, the government and nationalisation. In truth, the cause may be a combination of all these factors, but whatever the cause, the diesel shortage is acting as a significant constraint on further economic development and is an ongoing headache for the President Evo Morales.

Fuelling Bolivia’s crisis BBC News Online (8/11/07)


1. Use supply and demand analysis to illustrate the reasons for the shortages in diesel in Bolivia.
2. Explain the impact that fuel subsidies may have had in causing the shortages of diesel. Use supply and demand analysis to illustrate your answer where appropriate.
3. Discuss the underlying factors that may be leading to the shortages in diesel.