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Bolivia Makes Record Seizures of Contraband Fuel

BOLIVIA / 4 DEC 2012 BY HANNAH STONE EN

Bolivia is on course to seize a million liters of contraband fuel by the end of the year, five times that seized last year, according to officials.

Director of the National Hydrocarbons Agency (ANH) Gary Medrano said that the authorities had confiscated nearly 800,000 liters so far this year, and that he expected the figure to reach 1 million by the end of December. This is a massive rise from the 200,000 liters seized last year, as El Diario reported.

Medrano said that the record seizures were the result of the work of the armed forces in border zones, and named several crossing points on Bolivia’s borders with Brazil, Peru, and Chile as the most difficult places to control (see map).


View Fuel smuggling Bolivia in a larger map

The official explained that illegal transporters often take fuel close to these crossing points and sell it on to others who take it over the border.

InSight Crime Analysis

The Bolivian government heavily subsidizes fuel, meaning that it is far cheaper than in neighboring countries. Fuel in Bolivia costs about $0.54 a liter, while prices in Brazil, Argentina and Peru range from double to triple that. In Brazil, fuel sells at between $1.59 and $1.85, depending on the distance from the border, according to figures from the ANH. Prices in Argentina and Peru go from about $1.15 to $1.60.

These price discrepancies create a big incentive to traffic fuel over the border from Bolivia into neighboring countries, and the ANH has estimated that some 30 percent of Bolivia’s subsidized fuel is sold abroad. The demand for contraband fuel is also driven by the fact that gasoline is used to produce cocaine.

It would be extremely difficult politically for the government to cut these subsidies substantially. President Evo Morales tried to slash the subsidies in December 2010, citing the fact that much of the fuel was trafficked into Chile, Brazil and Peru, but he met with massive protests and was forced to backtrack.

A similar problem is faced in Venezuela, where large amounts of heavily-subsidized fuel are trafficked over the border into Colombia. One Colombian official estimated earlier this year that 38 million liters were smuggled each month from Venezuela into a single border state.

Both Venezuela and Bolivia are trying to halt fuel trafficking by using electronic tracking chips to monitor sales. A similar system has been put in place in Peru to monitor sales of gasoline, tracking the locations of fuel trucks in the Apurimac and Ene River Valley (VRAE), in an effort to prevent it being used for coca production.

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