Analysts believe that food subsidies can be gradually eliminated and prices are close to neighboring countries to avoid smuggling, but an amendment must be made for those affected.
The Minister of Hydrocarbons, Mauricio Medinaceli – in the last published article, showed that it is first necessary to gradually or stagger it, because it does not help if it is eliminated immediately as in December 2010.
Second, if you want to help low-income families, implement direct support for the poor at the same time, as Salvatoria did. Third, dialogue with neighborhood councils, unions and others is important.
Former Budget Vice Minister Ramiro Cavero said that the biggest corruption subsidy generated in Bolivia is that the price of gasoline costs less than half that in neighboring countries and that it generates smuggling.
It is agreed that the support will be gradually increased and the price will be reduced by a few hundred, because this plan cannot be long-term.
He added that he could look to the sectors in need of machinery so that this policy could be better put in place. “If, for example, you want to support public transportation, you can offset it with a vehicle emissions tax or if you export an industry that consumes diesel, you can pay money when the product comes out.” he said.
Another option is subsidies for those who buy electric or GNV vehicles to reduce the import of gasoline and diesel.
For economist Fernando Romero, the root problem is the fixed exchange rate, which feeds the subsidy that makes Bolivia the cheapest fuel in the region. “This generates an extraordinary level of smuggling and the use of gasoline in cars and illegal activities. As long as this phenomenon exists, we will not attack the underlying problem,” he noted.
Industry analyst Francis Zaratti points out that support is blind and benefits the rich and the poor. “This support goes to Argentine and Peruvian cars, and RIN is defeated and YPFB will fail,” he said.
For this reason, an attempt must be made to make the price closer to that in neighboring countries, where gasoline costs between seven and nine bolivianos, but taking into account the effect it can have on the household basket. “The effect of that fallout, which can have an increase in the price of gasoline, must be calculated on people, because transportation and food are increased and therefore compensation must be sought,” he pointed out.
