The analysis highlighted the diesel shortage, the gradual subsidization of fuels, and the...###

The analysis highlighted the diesel shortage, the gradual subsidization of fuels, and the production of biodiesel as an alternative that should manage complex variables to be viable.

ISSUE 133 | 2024

Vesna Marinkovic U.

Emphasizing that Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) does not have the capacity to obtain foreign currency for fuel imports, Jorge Akamine, former president of the Santa Cruz Economists Association, proposed free importation as a measure aimed at ensuring the secure supply of fuels in Bolivia.

Just days before the official statement by the president of the state oil company, Armin Dorgathen, indicating that the government had given the green light to seven private companies for fuel importation, Akamine stated that it was an urgent short-term measure to alleviate the critical shortage situation and begin the restoration of reserve accumulation in the country.

Indeed, in a scenario of criticism and uncertainty generated mainly by the lack of diesel in Bolivia, in the first days of August the president of YPFB informed that the state company had authorized private companies to import fuel for their own consumption, within the framework established by Supreme Decrees 28419 and 4718, which define the procedures for authorizing the importation of hydrocarbons and their refined products.

Akamine believes that, in addition to authorizing national companies, the government should allow the transportation of fuels to be delegated to transnational companies that could handle the importation and distribution of fuels in Bolivia.

Along the same lines, he proposed addressing the deficit situation of public companies as one of the many short-term measures that help stabilize the crisis situation in the country, emphasizing that it is necessary to rethink the entire state administration as a solution to the complex situation the country is going through.

REMOVING THE GRADUAL SUBSIDY

The current president of the Economists Association, Claudia Pacheco, stated in turn that another of the measures the government must undertake to stabilize the economy is to implement the gradual subsidy on hydrocarbons, to avoid a traumatic impact on the population, especially the poorer segments.

She emphasized that the measure of implementing two types of gasoline with different octane ratings, as a way to alleviate the economy, is not the most important and added that gasoline is not one of the main factors convulsing Bolivia, stemming from blockades and protests that are primarily based on the absence of diesel.

“This issue is not being addressed nor is a solution being sought, therefore, it is necessary to attend to it and truly say what is going to be done to solve the diesel shortage that affects national and international heavy transport, which is also unable to operate properly,” she noted, mentioning that along with the availability of diesel, it is important to authorize the use of biotechnology for greater production efficiency, as demanded by several agricultural sectors in the Santa Cruz department.

DIGITAL CURRENCY

When asked whether the private sector could use, for example, a digital currency like USDT, the digital dollar, to protect their financial transactions, especially in a context of a current lack of dollars, Pacheco was clear in affirming that it is possible and necessary. However, she emphasized the importance of having regulations from the government that guarantee the transactions.

“…currently importation is a specific difficulty for the government and it would be ill-advised to think that it should dedicate itself to importing grains to manufacture biodiesel…”

“Consequently, it is possible to use cryptocurrencies as easily as a QR code is used, which is already being used in other parts of the world, and to use technology to our advantage,” Pacheco said.

In this regard, Akamine indicated that it is an issue that has gained importance especially since the lifting of the veto by the Central Bank of Bolivia on crypto-assets, but agreed with Pacheco on the need to have regulations that regulate and protect transactions. He highlighted, however, the traceability that digital currency offers, suggesting training to avoid fraudulent situations.

PRODUCING BIODIESEL OR IMPORTING GRAINS

When asked about the viability of biodiesel production in Bolivia, Akamine emphasized the importance of the availability of raw materials before launching plants to make this alternative effective in replacing diesel imports for internal consumption.

“The issue of raw materials is a question we continue to ask ourselves,” he said, adding that if only soy, the most available raw material at the moment, is to be used, this could negatively affect its export and the generation of foreign currency for the national market. How do we do it? he asked in this regard.

He maintained that a solution to not have to expand the agricultural frontier and to encourage grain production in Bolivia is to make use of biotechnology, demanded by several groups in the agricultural sector in Santa Cruz, even motivating mobilizations and blockades.

However, he acknowledged that this is not a short-term issue and that the use of soy, suspending its export for biodiesel generation, would further complicate the national economy, since it would restrict the inflow of foreign currency into the country. In this framework, he suggested that the government's proposals be more appropriate to the national reality.

Claudia Pacheco recognized that the use of biotechnology is the most appropriate to avoid having to, precisely, expand the agricultural frontier in Bolivia. She also highlighted the need for tax incentives so that biodiesel production meets demand and can be exported. For the moment, she said, CAO requires 40 million liters of diesel monthly for the last five months, that is, 200 million liters to guarantee production.

Akamine admitted that currently importation is a specific difficulty for the government and that it would be ill-advised to think that it should dedicate itself to importing grains to manufacture biodiesel, predicting that soy will be the raw material destined to meet Bolivia's biodiesel production goals.

In this context, both acknowledged the complexity of the situation. However, they identified investment, tax incentives, raw materials, and sustainability as the fundamental factors to be considered in Bolivia's biodiesel production strategy.

“Claudia Pacheco recognized that the use of biotechnology is the most appropriate to avoid having to, precisely, expand the agricultural frontier in Bolivia.”