Bolivia has announced the end of its diesel subsidy after Congress approved a multi-million-dollar loan from the International Monetary Fund. The decision aims to help stabilise the country’s finances amid its worst economic crisis in four decades.

President Rodrigo Paz said diesel would now be sold at the same price the government pays to import it. The long-standing subsidy had drained the nation’s international dollar reserves by forcing the state to buy fuel at global rates and resell it at a loss.

Under the agreement with the IMF for a $1.9 billion bailout, Bolivia committed to ending all fuel subsidies by 2027. The conditions of the loan require the government to stop keeping fuel prices artificially low.

A decision on gasoline subsidies has not yet been finalised. To ease the impact of the change, the government plans to increase spending on some social programmes.

Earlier price increases for large diesel consumers, such as farmers, sparked protests. However, there has been no return of the large-scale anti-government demonstrations that disrupted parts of the country earlier this year.