Bolivia Did Not Run Out of Gas – It Ran Out of Dollars

Why world money, not mismanagement, explains Bolivia’s fuel crisis

In early 2025, Bolivia appeared to run out of money. Fuel queues stretched through cities, protests flared, and the government insisted the country was not bankrupt. For outside observers, the diagnosis was familiar: another resource-rich country undone by poor governance, wasteful subsidies, or institutional failure.

But this explanation misses the point.

Bolivia’s crisis was not caused by hydrocarbons themselves, nor by a lack of economic discipline. It was caused by something more basic and more structural: the fact that oil and gas are priced and paid for in US dollars – and Bolivia cannot print them.

During the commodities boom of the 2000s, Bolivia earned vast sums from exporting natural gas. Those exports filled the central bank’s reserves, stabilised the currency, financed infrastructure, and underpinned some of the most successful poverty reduction in the country’s history. By 2014, Bolivia held over $15 billion in international reserves – an extraordinary cushion for a low-income country.

A decade later, those dollars were gone. Not stolen. Not squandered. Spent.

Here is the paradox at the heart of Bolivia’s predicament. The country exports gas in dollars, but it also imports fuel in dollars. And those imports have risen steadily as domestic gas production fell, refineries underperformed, and consumption grew. Diesel alone became a fiscal sinkhole, kept artificially cheap through subsidies that were politically untouchable and economically costly.

When export revenues collapsed after 2014 – as gas fields depleted, prices fell, and Argentina and Brazil secured their own supplies – Bolivia’s access to dollars dried up. But its need for dollars did not. The state still had to pay for fuel, machinery, food, and debt. Every stabilising policy depended on spending a currency the country does not control.

This is why familiar debates about the ‘resource curse’ do not help much. Bolivia did not fail to industrialise because it lacked ambition or capacity. It tried. Gas separation plants, fertiliser factories, refining expansions – most struggled, stalled, or arrived too late.

What mattered more was the form that resource wealth takes. Hydrocarbons become money only when they are sold on world markets. And in the twenty-first century, world money is overwhelmingly the US dollar.

That fact alone reshapes development options. Dollar dependence exposes countries like Bolivia to shocks generated elsewhere: interest rate rises in the United States, oil price movements set in London and New York, and financial judgements delivered by distant markets. When crises hit, reserves disappear quickly. Stability becomes expensive. And policy space narrows fast.

Bolivia’s government chose to defend exchange-rate stability and protect household purchasing power, even as reserves vanished. This was not irrational. In a deeply dollarised society, devaluation would have hit the poorest hardest. But preserving stability required bleeding dollars the country no longer earned. By 2024, the cupboard was bare.

Seen through this lens, Bolivia’s crisis looks less like a national failure and more like a structural trap. Resource exporters in the Global South are forced to earn the currency they must spend, while the rules of that currency are set elsewhere. Inequality is reproduced not just through trade, but through money itself.

Bolivia did not run out of gas. It ran out of world money. Until that reality is confronted, debates about fixing governance or tweaking subsidies will continue to chase symptoms rather than causes.

McNelly, A. (2026). Hot air: hydrocarbons, world money and development in twenty-first century Bolivia. Review of International Political Economy.
https://doi.org/10.1080/09692290.2026.2661358

Dr Angus McNelly is a Lecturer in International Development at King’s College London. His research focuses on the political economy of development in Latin America, with particular attention to natural resources, energy, and social movements.