La Paz, 07/10/2026-. The recent warning from the president of YPFB regarding the critical level of gas reserves and its immediate consequences for Bolivia’s energy security is not news, but rather a confirmation of a structural crisis that specialists and analysts have been warning about for years.
A leg with gangrene
If energy is the engine of the economy, the advance of the Bolivian energy sector is suffering from a critical paralysis that requires urgent intervention. The national economy, under heavy state management, rests on two fundamental “legs”: hydrocarbons (YPFB) and electricity (ENDE), the latter being highly dependent on the former.
The hydrocarbons leg shows severe deterioration, for reasons that are all too well known. Faced with this situation, the dilemma does not lie in the simplistic dichotomy between maintaining the status quo of YPFB or privatizing it. There are constitutional restrictions and political realities (the “consent” of the stakeholders) that force us to move beyond that debate. The approach must be pragmatic: how do we get the sector moving again?
Urgent and sensible measures
The emergency suggests taking urgent measures that are compatible with the patient’s critical state and acceptable to the stakeholders. Among the measures proposed, the following stand out:
1. Approve a “short law” on hydrocarbons that modifies the tax regime, replacing the fixed taxation (50-50) of Law 3058 with a scale proportional mainly to production volumes and market prices. However, will this be enough to attract investment?
2. Align the cost of energy in the domestic market with reality, adjusting prices and tariffs without punishing the most vulnerable sectors. The goal is the recovery of the damaged leg by turning to “surgeons” external to YPFB. The liberalization of imported fuel commercialization is an example to follow in other activities.
3. Strengthen the “electricity leg,” which calls for an adjustment of the gas tariffs provided to thermoelectric plants, which partially impacts the price of electricity generated from renewable sources.
4. Leverage the renewable potential that Bolivia possesses in abundance, attracting public, mixed, private, institutional, cooperative, and international cooperation capital for this purpose.
The recent Supreme Decree DS 5647 is a necessary step toward protecting the electricity leg, as it introduces an automatic adjustment of electricity tariffs with a monthly cap of 5% (previously it was 3% semiannually), in order to compensate for inflation.
Ultimately, the cure consists of launching, once and for all, an Energy Transition Plan that makes us less dependent on gas for electricity generation. In the case of electromobility, which is experiencing a boom due to the collapse of fuel commercialization, it is inconsistent with the proposed changes to continue charging the batteries of these vehicles with electricity generated by thermoelectric plants.
The emergency will not wait. It is time to move, without further delay, from warning to action.
Best regards,
Francesco