La Paz, 06/30/2026. The implementation of a unified and flexible exchange rate, effective as of Monday, June 29, 2026, marks a milestone in the country’s monetary policy. What implications does this adjustment (at 9.73 Bs/$) hold for the energy industry?
Users: What to expect regarding prices?
It has been ratified that there will be no changes to gasoline and diesel prices. In the case of gasoline, the price remains at 6.96 Bs/l—a figure that bears a curious analogy to the previous official exchange rate. This stability is justified by the argument that 40% of the gasoline consumed is domestically produced, which offsets the import cost of the remaining 60%, whose value exceeds one dollar per liter. Regarding diesel, the price of 9.80 Bs/l is now aligned with the new exchange rate, which should reduce the price differential with neighboring countries and, consequently, discourage smuggling.
In the electricity sector, the government has announced the continuation of the “Descuento Patria” (formerly the Dignity Tariff) and the freezing of non-social tariffs. This measure, while popular, is counterproductive: it disincentivizes necessary investment in generation and transmission, delays the transition to renewable sources, and perpetuates the burning of subsidized natural gas in thermal power plants. As an alternative, until a true alignment with real costs is achieved, it would be worth evaluating indexing mechanisms similar to those in the water sector, using the “Unidades de Fomento a la Vivienda” (UFV) to reflect inflation.
YPFB and ENDE: Challenges for state-owned enterprises
For YPFB, currency unification is a double-edged sword. While it facilitates access to foreign currency to pay off external obligations—freeing the company from previous restrictions—its financial health remains compromised. With fuel prices frozen, the state-owned company’s profitability depends on the international price of oil remaining below $70/bbl (following the peaks of $115/bbl recorded during the crisis with Iran). However, the decline in revenue from the state’s share of oil company profits limits its capacity for reinvestment in exploration and infrastructure, such as pipelines, which are key to reducing dependence on road transport. Currency unification is a positive step toward attracting capital, but the reactivation of the sector remains contingent upon a new Hydrocarbons Law.
For its part, ENDE faces a similar scenario: without a tariff adjustment that reflects real costs, the state-owned company will continue to face severe limitations in both maintaining existing infrastructure and expanding the system. The future of the electricity sector, much like that of hydrocarbons, depends critically on the approval of a new Electricity Law, pending discussion in the Plurinational Legislative Assembly.
Fiscal impact and the role of the State
The subsidy implicit in the freezing of prices and tariffs puts pressure on the public coffers, limiting the capacity to fund social programs and aggravating the fiscal deficit. While in other economies fuel taxes are a vital source of revenue, in Bolivia the State bears the cost of the subsidy, foregoing significant tax collection. In the long term, the new exchange rate scheme opens a window of opportunity: the State could lighten its financial burden by allowing greater private sector participation in fuel commercialization (currently a YPFB monopoly) and in electricity generation via renewable sources, thereby delegating prerogatives that currently stifle the national budget.
Best regards,
Francesco