March 15 (Bloomberg) -- Bolivia's President Carlos Mesa proposed holding general elections in August, two years ahead of schedule, in a bid to break a deadlock over hydrocarbon legislation.

Mesa, who threatened to resign last week over protests against the government's energy policies, said that tomorrow he will ask the 157-member Congress to call elections on Aug. 18 after talks with opposition parties failed to reach an agreement on proposed royalties of 18 to 38 percent on oil and gas production.

The Movement Toward Socialism, Bolivia's second-largest opposition party led by Congressman Evo Morales, has been organizing roadblocks for weeks to press for 50 percent royalties on oil and gas produced by foreign companies such as ExxonMobil and Spain's Repsol YFP.

Mesa's plan aimed to spur foreign investment to tap Bolivia's 28.7 trillion cubic feet of natural gas, Latin America's second-largest reserves after Venezuela, to drive economic growth and create jobs.

``I'm blocked in the Attorney General's office, I'm blocked in Congress, and they're blocking the roads,'' Mesa said in a speech broadcast on Bolivian cable television station Bolivision. ``What can I do in these circumstances?''

``The president is up against the wall,'' Bolivian political analyst Carlos Toranzo told CNN Espanol. ``He has governed for the past 17 months with a Congress that has done everything it could not to cooperate.''

The government says blockades are costing Bolivia about $14 million a day in lost business and cut exports in January by 10 percent to $148.7 million.

To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net

Last Updated: March 15, 2005 22:28 EST