Bolivia faces weeklong diesel shortages on Arica port closure

Bolivia, which has struggled with fuel shortages for years, now faces a weeklong scarcity of diesel as adverse weather restricts imports, a senior government official said.

State oil company YPFB has seen diesel supplies curtailed by 22% as rough seas have closed the Chilean port of Arica and unseasonably low river levels have curbed imports from neighboring Paraguay, CEO Armin Dorgathen said in a press conference late July 22.

The oil tanker Byzantium and two diesel tankers are unable to unload at Arica, according to Dorgathen. Bolivia is holding talks with other Pacific ports and is also looking to increase overland imports of diesel from Peru, Paraguay and Argentina, he added.

Long lines have formed for several days at filling stations around the country and are likely to continue through July 25, Dorgathen said. YPFB supplies 7,000 cu m/d of diesel to the domestic market, he said.

"We have climate factors that are complicating our logistics," Dorgathen said in broadcast comments in La Paz. "We're going to have the problem all over the country."

Diesel and gasoline are regularly imported into Chile's Arica port, primarily from the United States, S&P Global Commodities at Sea data shows. In May, for instance, nearly 300,000 barrels of diesel was imported into Arica from the US.

The landlocked Andean country plans to build three biodiesel plants to reduce its $3 billion annual fuel import bill.

Bolivia, which was downgraded by S&P to 'CCC+' from 'B-' in November after the Central Bank depleted its international reserves, is struggling to increase hydrocarbons output due to lack of foreign investment. Natural gas output was running at 32 million cu m/d through end-February, according to the Hydrocarbons Ministry.

Bolivia, which mainly supplies natural gas to Brazil and Argentina, saw hydrocarbons export revenue drop 31% on the year to $2.06 billion in 2023, according to the National Statistics Institute.