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Bolivia Implements State Intervention to Tackle Acute Fuel Shortage Crisis

The Bolivian government has placed the state oil company YPFB under temporary supervision to address severe fuel shortages and logistical issues.

By Staff Correspondent
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Bolivia Implements State Intervention to Tackle Acute Fuel Shortage Crisis

The Bolivian government has taken decisive action to address the ongoing fuel crisis by placing the state oil company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) under temporary supervision. This move aims to tackle the severe shortages and logistical issues that have plagued fuel imports and distribution in the country.

Government Intervention to Restore Efficiency

A government decree, issued on September 2, mandates the 'extraordinary, transparent and temporary' takeover of YPFB. The intervention is intended to last up to 180 days and will be overseen by a commission comprising several ministerial representatives. The primary objectives are to restore efficiency in fuel supply, strengthen the logistics chain, and bring transparency to YPFB's operations.

President Rodrigo Paz, who took office in November 2025, has faced significant challenges in managing the economic crisis inherited from previous administrations. The fuel crisis has exacerbated the situation, leading to long lines of drivers queuing for scarce fuel across the country. The government's decision to intervene in YPFB's management is a response to these pressing issues.

Addressing Logistical Shortcomings and Fuel Prices

Hydrocarbons Minister Marcelo Blanco acknowledged that 'regular measures we had taken didn't work' and attributed the fuel shortage to 'logistical shortcomings in YPFB's import and distribution' processes. The Ministry of Hydrocarbons has also announced plans to gradually strip YPFB of its role in fuel marketing, allowing the state firm to focus on extraction, exploration, and refining.

In an effort to curb fuel smuggling and address shortages, the government hiked diesel prices from 9.80 bolivianos (about 80 US cents) a liter to 18 bolivianos (US$1.50) last week. This decision sparked protests, particularly from farmers in the northeastern Beni department and Santa Cruz, Bolivia's economic powerhouse. The unrest has defied a state of emergency declared by President Paz in June to quell massive protests against his administration.

President Paz's economic policies, including the scrapping of fuel subsidies in December 2025, have been met with resistance. The lack of fuel subsidies has drained Bolivia's foreign currency reserves, failing to end the long lines at gas stations as promised. Paz is currently in talks with international lenders over a multibillion-dollar bailout to stabilize the economy.

Source: BSS

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