Bolivia lifts all fuel import restrictions
Wednesday, December 31st 2025 – 10:38 UTC
Bolivian subsidies ended up in a growing fuel smuggling business to Peru, it was explained
Bolivia’s Hydrocarbons Ministry has announced a sweeping liberalization of the national fuel market, lifting long-standing import restrictions and implementing a zero Specific Consumption Tax (ICE) for private importers.
The move follows the government’s December 17 decision to eliminate fuel subsidies, a policy shift that has seen gasoline prices jump to Bs 6.96 and diesel to Bs 9.80 per liter.
Hydrocarbons Minister Mauricio Medinaceli confirmed that regulations were being terminated to allow private players to import fuel directly, thus transitioning to a hybrid model of state regulation and market liberalization.
To prevent private companies from focusing solely on high-traffic urban centers like La Paz and Santa Cruz, the government will maintain wholesale blocks to guarantee supply in remote, less profitable regions.
The market cannot be completely liberalized, because companies would concentrate only in major cities, Medinaceli explained, adding that strict quality standards will be enforced, with licenses subject to revocation for non-compliance.
The policy shift comes as Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) reveals the staggering scale of the country’s energy dependency. YPFB President Yussef Akly reported on Tuesday that Bolivia now imports 100% of its diesel and 60% of its gasoline.
Akly attributed this decline to bad policies over the last 15 years, noting that domestic refineries were currently operating at only 30% capacity. Despite these challenges, Akly reported that storage stocks have stabilized under the new administration, with diesel reserves currently at 4.5 days and gasoline at six days.
A primary driver for the subsidy removal was the rampant institutionalized corruption of fuel smuggling. Medinaceli claimed that subsidized Bolivian fuel was being diverted on a massive scale to neighboring countries, estimating the illicit trade at $2 million to $3 million per day.
Medinaceli alleged that the impact of the policy change was felt immediately across the border, claiming that petrol stations in Peru faced shortages once the flow of cheap Bolivian diesel was cut off. He noted that domestic diesel consumption has already dropped by nearly 50% following the subsidy removal.
While the Ministry linked Peruvian fuel shortages to the Bolivian policy change, independent verifications suggest a more complex reality. Smuggling was so systemic that Bolivian tankers were directly supplying Peruvian stations. According to Bolivia Verifica and local Peruvian journalists, current shortages in regions like Pucallpa were primarily due to internal administrative and logistical crises within Petroperú, rather than the cessation of Bolivian smuggling.
