Bolivia Swears In New Economy Minister as YPFB Owes US$1.056bn to Traders

Bolivia · ECONOMY

A cabinet change, a billion-dollar fuel debt and claims of a smuggling mafia inside the state oil company mark the hardest week yet for Rodrigo Paz’s economic team.

President Rodrigo Paz swore in Christian Morales Burgos as Bolivia’s new economy and public finance minister on Tuesday 25 August 2026, ordering him to preserve stability and keep negotiating with multilateral lenders, hours before the hydrocarbons minister told the legislature that the YPFB debt to fuel traders Trafigura and Vitol has climbed to US$1.056 billion.

A new hand on the economy

Morales Burgos, until now vice-minister of the treasury and public credit, took office at the Casa Grande del Pueblo in La Paz in replacement of José Gabriel Espinoza, who led the economy ministry for the first nine months of the Paz administration. The president said one reason for the appointment, beyond Morales’s academic and professional credentials, was his direct knowledge of the intense negotiation processes of the government’s first months, according to Unitel.

Paz instructed the new minister to continue negotiations with multilateral organizations, naming the World Bank, CAF, the Inter-American Development Bank and the International Monetary Fund, with the goal of securing commitments of between US$7,000 million and US$10,000 million for Bolivia. He also asked him to advance the so-called 50-50 agenda, intended to give regions a larger role in economic development, and to push an investment law already sent to parliament.

Under Espinoza, Bolivia reached a staff-level agreement with the IMF for US$1.9 billion, which remains subject to approval by the fund’s executive board and which officials say could mobilize more than US$5,000 million in total through other institutions. Morales said his commitment will be to preserve stability, strengthen public finances, create conditions for investment, production and employment, and keep recovering confidence in the economy, according to Urgente.bo.

YPFB debt to Trafigura and Vitol reaches US$1.056 billion

The same Tuesday, hydrocarbons minister Marcelo Blanco appeared before the Legislative Assembly to answer 37 questions at an interpellation requested by Alianza Popular deputies Rolando Pacheco, Claudia Herbas and Karina Donaire. There he gave the first detailed public breakdown of the YPFB debt: US$473 million owed to Trafigura, of which US$289 million corresponds to 2025 and US$184 million to 2026, and US$583 million owed to Vitol, split between US$462 million from last year and US$121 million from this year, according to the state news agency ANF.

Blanco warned that if YPFB fails to meet the payments, the two trading houses, which are Bolivia’s main fuel suppliers, will stop delivering fuel and crude to the country. The disclosure landed one day after the Bolivian Hydrocarbons and Energy Chamber denounced that the state owes more than US$300 million to companies in the sector and requested a meeting with Mario Justiniano, who was then interim economy minister.

During the interpellation, Blanco also defended the higher premium paid per barrel under the Trafigura contract compared with a 2024 deal signed by YPFB’s subsidiary Botrading, arguing that volume, delivery terms, market prices, urgency and payment deadlines all affect the final cost.

A ‘mafia’ inside the fuel sector

Pressed on the long queues at service stations across the country, Blanco blamed organized crime rather than a simple lack of supply. There is a mafia entrenched in YPFB and in the ANH, they are smuggling fuel, he said, referring to the state oil company and the national hydrocarbons regulator, and called that smuggling one of the main reasons diesel is missing from the pumps, according to La Razón.

The minister apologized once again to the country for the lines of trucks and cars that form daily at fuel stations. He said a joint military and police operation of more than 300 officers deployed to tackle the irregularities has still not fully normalized distribution, and he defended delays in supply controls as necessary to keep low-quality fuel, known locally as junk gasoline, out of drivers’ tanks.

The shortages ripple beyond motorists: the lack of diesel hits freight transport, farm production and every activity that depends on machinery, feeding pressure on the government from producers and exporters.

Subsidy strain behind the debt

The YPFB debt is the financial face of Bolivia’s fuel subsidy. The government lifted the subsidy in January after more than two decades, at a fiscal cost it puts above US$3,000 million, but later restored it, and prices will now stay frozen at least until the end of the year for most consumers, according to eju.tv. Days earlier the government set a reference price of Bs18 (about US$2.6) for diesel sold to large consumers such as agroindustry and mining cooperatives, a measure covered previously by The Rio Times.

Speaking at the swearing-in ceremony, Paz said the effort to stabilize the economy passes through making transparent and eliminating once and for all what he called the perverse incentives in the fuel system, and asked Bolivians to put their shoulder to the country. Selling fuel below regional market prices encourages smuggling, which the government identifies as a central driver of the diesel scarcity.

YPFB president Sebastián Daroca has described the sector’s crisis as structural, saying the company cannot by itself absorb the YPFB debt gap between international import prices and regulated domestic prices, and that for three weeks it has relied on financial injections from the National Treasury to buy all the fuel the country needs. An analysis published by Urgente.bo put YPFB’s economic loss for 2025 at Bs250.7 million (about US$36 million) once depreciation, subsidies, exchange rate and financial costs are counted.

Pressure builds on Paz to go further

The ministerial change has not satisfied the country’s trade guilds. César González, executive secretary of the National Confederation of Guilds of Bolivia, said it is important that the president work with the best and most honest people in the country and that he change his cabinet of ministers, and demanded that the government present the package of laws it promotes for economic reactivation, according to Unitel.

The backdrop is a shrinking economy. A study by the Cebec-Cainco business research center, reported by La Razón, found that Bolivia’s economy contracted 3.2 percent in the first half of 2026, while legislators from several parties are pressing the government to repeal or modify the diesel decree. For Morales Burgos, the in-tray starts with the fuel debt, the stalled IMF board approval and a subsidy bill the government itself calls unsustainable.

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Sources

• unitel.bo
• www.noticiasfides.com
• larazon.bo
• eju.tv
• eju.tv

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