The Bolivian government drastically increased taxes on fuel, by over 70%. It did so for rational capitalist reasons, namely that higher prices in neighboring countries had fostered a thriving black market. However, the official reasoning leaves something to be desired:
"We can no longer subsidize either smugglers or the powerful who have five or six cars. What we want to do is to use the money for fuel subsidy for the benefit of the Bolivians, for the neediest," he argued.
It is hard to justify a regressive tax by explaining how it will help the poor. Bolivians themselves know a regressive tax when they see one, and are protesting the "gasolinazo."
It is good that the Bolivian government recognizes the negative consequences of a well-intentioned law and does not simply stick to it. Nonetheless, without some sort of cushion the tax hike will hurt the poor the hardest, and Evo Morales will take a political hit (though he was conveniently in Venezuela at the time of the announcement). The "powerful who have five or six cars" will still do just fine.