By Álvaro Ríos, Vision 360:

I sense that the energy shortage could bring the country to its knees. I hope I am completely wrong and that we are able to communicate and make Bolivians understand that major changes are necessary and that we are going to suffer.

Bolivia is moving along a very delicate path toward a chronic energy shortage. This is foreseeable because part of the Bolivian population, for 20 years (2005–2025), has been indoctrinated by the Movement Toward Socialism (MAS) into believing that the almighty State can do everything. In other words, that the welfare State — with its ministries, institutions, and hundreds of public companies — can invest and provide the country with everything: healthcare, education, food, energy, highways, a fixed exchange-rate currency, and much more.

This ideological indoctrination by MAS took place after it inherited, in 2005, a country with proven gas reserves close to 13 to 14 trillion cubic feet (TCF) and hundreds of billions of barrels of oil and liquids associated with natural gas. From 2005 to 2025, nearly USD 70 billion were exported in natural gas, LPG, and reconstituted crude oil. Annual export revenues exceeded USD 6 billion.

There was fresh cash for everything. So that YPFB and ENDE, with their own resources and loans from the Central Bank of Bolivia (with kickbacks included, of course), could build whatever they pleased. YPFB invested in biodiesel plants, urea plants, and refinery modernization projects that had no guaranteed raw material supply or were located in unsuitable places. It drilled several “patriotic” wells simply to celebrate departmental anniversaries. The same happened at ENDE, where combined-cycle plants were purchased recklessly, creating an enormous oversupply, along with other unnecessary infrastructure such as the electricity export line to Argentina. None of ENDE’s or YPFB’s projects went through even a basic feasibility study. These companies became tools serving the political power of the day and its triumphalist propaganda.

Those were glory days. “YPFB, the force that moves Bolivia,” “Bolivia, the energy-exporting heart of Latin America,” “We have a sea of gas that you cannot even imagine,” and much more. The reality of the energy industry, however, was moving in the opposite direction. Gas and oil reserves were not being replenished, gasoline and diesel imports were increasing sharply, gas exports had been declining rapidly since 2015, and the infrastructure that had been built was gradually left with idle capacity.

Subsidies for all energy products were maintained under the boast that “the people” were being protected. ENDE and YPFB gradually became marginal companies — and, frankly speaking, deficit-ridden ones with large debts owed to the State. At the beginning of 2025, the whole mess exploded. There were no dollars left — neither at YPFB nor at the Central Bank — to import gasoline and diesel, and the country fell into chronic shortages. The blame was placed on rough seas, the start of the school year, excess demand, and so on, while underneath it all major backroom diesel deals were taking place.

Well, if things continue this way, by 2030 there will be no gas exports, while energy imports (including diesel, gasoline, jet fuel, natural gas, and LPG) will range between USD 3.2 and 3.5 billion at USD 80 per barrel. And where will the dollars come from? That is why several tough measures must be taken to supply the country and stop the hemorrhaging caused by imports. It must begin with approving a Hydrocarbons Law to attract private capital into exploration, naturally by reducing taxes and “raising prices.” ENDE and YPFB must be made viable again (downsizing them, merging them, partnering them with private capital, shutting down unproductive units, privatizing some operations, etc.). Subsidies on diesel, gasoline, natural gas, and LPG must be eliminated so prices fluctuate according to international prices, just like the exchange rate. At the same time, the country must turn to the IMF for fresh money and ask the population to endure hardship.

From the surveys I have conducted, I am convinced that part of the Bolivian people still believe YPFB and ENDE are swimming in money, should not be touched, and must remain exactly as they are. That these two companies, together with the almighty State, can continue supplying subsidized energy and provide the country with everything it needs indefinitely and without any problem. That new Electricity and Hydrocarbons laws are unnecessary, and that private capital is not needed because it would only “loot” the country’s natural resources. That turning to the International Monetary Fund for fresh cash to solve the country’s energy supply problem is heresy.

In other words, part of the Bolivian population believes we are still living in times of energy and economic prosperity. Because of this, I see it as extremely difficult to approve laws, remove subsidies, and restructure YPFB and ENDE in order to stop losing money. As some political scientists told me about three weeks ago: “Bolivia has not yet hit rock bottom.” I have the feeling that until this happens, the structural changes mentioned above in the energy sector will be nearly impossible to carry out — even more so given the current politicization in the country, which is affecting the democratic system.

I sense that the energy shortage could bring the country to its knees. I hope I am completely wrong and that we are able to communicate and make Bolivians understand that these changes are absolutely necessary and that we are going to suffer. Narrative and reality are extremely important when trying to implement change.