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Chile protests turn deadly as Latin America buckles under rising energy prices

With two people killed in the southern city of Punta Arenas during Chile protests against hikes in natural gas prices, President Sebastián Piñera may be facing his biggest crisis yet.

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Two people in the southern Chilean city of Punta Arenas were killed Tuesday night when a truck ran into the barricade where they were protesting the government's plan to increase natural gas prices.

The world's southernmost city, with a population of 110,000, remained largely paralyzed today by a general strike as local residents and elected officials demand that the national government maintain subsidies on natural gas, which is widely used in the region to power vehicles, heat homes, and provide energy for businesses.

The protests are the latest in a wave of anger in Latin America as governments attempt to reconcile budgets with energy prices, which have climbed to levels not seen since the record highs of 2008.

Close on Bolivia's heels

Just two weeks ago, Bolivian demonstrators took to the streets in the week between Christmas and New Year's to protest against President Evo Morales' plan to reduce subsidies for gasoline and diesel. Mr. Morales ultimately reversed his decision and reinstated subsidies on oil and gas.

Likewise in Chile, which imports 93 percent of its gas, analysts expect President Sebastián Piñera may have to back down from the planned 17 percent hike in natural gas prices as the strike in Punta Arenas and the surrounding region of Magallanes threatens to become his biggest crisis since taking office a year ago.

Indeed, government spokeswoman Ena Von Baer told reporters this morning that the administration is open to adjusting its plan but didn't want to do so under threat of strikes and violence. "We want dialogue, to continue talking in a serious and responsible way about the future of Magallanes," she said.

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