LA PAZ – Bolivia’s economic situation could become “delicate” if oil prices continue to drop, the CEO of state-owned oil company YPFB, Carlos Villegas, said in an interview with the Pagina Siete newspaper.
The Andean country could counteract the effects of the drop in the price of crude in the first half of 2015 because of the way the price of the natural gas exported to Argentina and Brazil is calculated, Villegas said.
“The situation could turn more delicate if the price (of oil) continues falling,” the YPFB chief said.
Bolivia does not export petroleum, but its economy depends on sales of natural gas to Brazil and Argentina, with the fuel’s price adjusted quarterly based on changes in the price of crude.
The price of the natural gas exported to Argentina is set based on the average price of crude during the previous quarter, while the price of gas sold to Brazil is calculated using the average price of crude in the prior six-month period, Villegas said.
The effects of the drop in the price of petroleum “are going to be slight” in the “first phase,” but they will be felt “in terms of revenues” if the drop continues, the YPFB chief said.
Oil revenues are distributed among the national, regional and municipal governments in Bolivia, with YPFB also getting a cut.
Argentina buys about 15.8 million cubic meters per day of natural gas from Bolivia, while Brazil imports some 33 million cubic meters per day of the fuel, YPFB said in a report earlier this month.
Argentina and Brazil paid YPFB $5.51 billion in the January-November period for natural gas.
Bolivia expects to save between $150 million and $200 million on imports of diesel and gasoline, thanks to the drop in energy prices, Villegas said.
The government buys these fuels from different countries at market prices and sells them at subsidized prices on the domestic market.