Bolivia Adjusts Diesel Prices, Opens Market to Private Importers Amid Crisis

Bolivia's government is implementing a tiered pricing system for diesel fuel in an effort to combat a worsening supply crisis and curb contraband. The new measures aim to "sincere the price," according to Minister of Hydrocarbons Marcelo Blanco, acknowledging the rising costs of imports and pressure on state oil company YPFB's finances.

Under the new scheme, individuals, public transport, and heavy transport vehicles refueling directly at service stations will continue to pay Bs 9.80 per liter. However, specific consumers who purchase diesel for transport to their own facilities will face a reference price starting at Bs 18 per liter, with this rate expected to become variable based on import costs and taxes. The government clarified that exceeding 120 liters of consumption does not automatically trigger the higher price.

The government hopes this price adjustment will incentivize private companies to import more diesel, thereby increasing supply. Minister Blanco indicated that private sector actors have committed to significant import volumes after government consultations, though he anticipates a transition period. The long-term intention is to gradually reduce YPFB's involvement in commercialization, shifting the responsibility for investment, import, and sales to the private sector, despite some "constitutional hurdles."

Meanwhile, in Santa Cruz, regional authorities are calling for the removal of existing barriers to private sector participation. Following a meeting with YPFB's president, the Comité pro Santa Cruz proposed eliminating tax burdens, specifically VAT and IT, and simplifying regulations related to controlled substances that hinder private imports. They also advocate for reviving underutilized oil production fields, promoting biofuels, and abolishing the National Hydrocarbons Agency (ANH) entirely.

Governor Juan Pablo Velasco reiterated the call for regulatory changes to facilitate private investment in all aspects of the fuel supply chain, from import and storage to refining and distribution. The government believes that narrowing the price gap between domestic and international markets will also diminish the incentive for smuggling.

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