(CNN) -- Police in Bolivia used tear gas to disperse hundreds of protesters who took to the streets protesting a hike on the price of fuels Monday.
The price of gasoline has risen 73 percent while diesel fuel rose at least 80 percent.
The unions representing the public transit workers called for an indefinite national strike in protest which was partially successful Monday.
Bolivian President Evo Morales defended the increase, saying it was needed partly because of Bolivian fuel being sold illegally to other countries, the state-run news agency ABI reported.
The government had frozen the price of gasoline and diesel for six years and subsidized the cost -- making the fuel a lot cheaper than in neighboring countries.
As a result, trafficking in fuels made it a very profitable business, said Vice President Alvaro Garcia Linera.
"The profit margin is so great that anybody who sells 10 liters of gasoline in Brazil or Peru makes enough money to live a week or two. Only 10 liters! That can't be. That can't be," he said.
The government estimates that Bolivia loses as much as $150 million a year in fuel sold outside the country.
But the "Gasolinazo," as the hike is being called, could be a big challenge to Morales who has enjoyed public support for his populist policies. Many are now questioning his commitment to the people.
"Why did he lie? His ministers said the price wouldn't go up a single peso and now this," said Marta Zurita, a homemaker in the capital Bolivia. "How can we move forward? This is bad, very bad."
Many fear the price increase won't be limited to fuel.
Taxi drivers raised their fares by as much as a 100% even though the government warned them not to go higher than 25%.
The drivers' union agreed to continue negotiations with the government Tuesday to reach an agreement on the new rates.
Others rushed to local markets to buy groceries fearing prices will soon go up.
Retiree Mary Ortuno said she wishes she could go shopping with a government official to see how much they could afford using only her income.
Journalist Gloria Carrasco contributed to this report from La Paz.