Bolivia suffers from fuel shortages, which can be felt in the endless queues at the pumps.
It is a crisis that is approaching an energy collapse, not yet as serious as the one suffered by Cuba and Ecuador, but which is going in that direction. We know the causes, but we understand less about YPFB’s strategy to deal with this crisis.
The lack of foreign exchange in the country affects two items: the import of fuels (50% petrol and almost 90% diesel) and the subsidy on the sale of these products (almost 100% of the selling price). In fact, the revenues from gas exports are no longer sufficient to cover these items.
YPFB’s strategy is divided into several axes, as well as “patch” measures such as additives of plant origin (biodiesel and bioethanol) and the unequal fight against smuggling.
First, the goal of eliminating or, at least, reducing the subsidy by marketing “premium” gasoline that offers a higher-octane rating, in exchange for lower energy efficiency and a substantial increase in price (up to 84%) is already underway. The consumer’s alternative will be to stand in line for hours to fill up with special gasoline or buy, without queues, but at a higher price, one of the premium gasolines. Something similar happens with the subsidy for diesel, for which progress has been glimpsed by allowing direct imports for self-consumption of agri-food and transport, which do not disdain to spend more as long as they continue to work. However, it happens that, entering into competition with the private sector, YPFB announces the import of a ULS diesel (low sulfide content) at a more expensive selling price, without subsidies and only for large consumers: business or negotiation?
Recently, the decree 5271 liberalizes the marketing of fuels in an uncertain and adverse context in legal and above all economic terms. Once again, the aim is to eliminate subsidies and shift the supply crisis onto the shoulders of the private sector.
Sure, this strategy helps mitigate the YPFB deficit, but it doesn’t solve the underlying problem, which is the lack of foreign currency for purchase. The collapse is approaching from the moment YPFB admits to having a stock of 28 million liters of fuel for only four days, while begging Petrobras to pay gas bills in advance (with a penalty of 12.3%).
Well, it is possible to reduce the subsidy, but what can still be done to avoid or at least mitigate the collapse of the energy sector?
The watchword should be: less demand to decrease supply.
We have seen that while petrol cars have suffered in queues, those that use methane have refueled without problems. And the same happens with the (still rare) electric cars. In the short term, the natural gas we have left (we don’t know how much, because YPFB continues to hide information with impunity) should serve to incentivize the use of GNV (vehicular natural gas) especially in public transport. One calculation, which is not part of an opinion article, shows a substantial foreign exchange saving with this measure even if some of the export gas were used.
In addition, the government should pay attention to the technical voices that have been calling for many years for the need and urgency of an energy transition, which consists of replacing the demand for fossil fuels with electricity generated from renewable sources that Bolivia has in abundance: water, sun, wind and heat from the earth.
In short, if structural measures are not taken, it is not because the problem is not understood, but because chains of corruption operate that privilege the family business over the common good.