MercoPress. South Atlantic News Agency

Bolivia: YPFB lawyer says current refining scheme is profitable

“Clearly, any criminal prosecution without evidence is political persecution,” Eduardo Saucedo insisted

Bolivia's State-run oil company YPFB's Legal Affairs Manager, Eduardo Saucedo, defended the creation of Botrading, a refining subsidiary, arguing that it resulted in savings worth over US$300 million despite prosecutors claiming otherwise.

Saucedo denied any irregularity or corruption, stating that all requested information was provided to the legislative committee investigating the alleged corruption scandal. Additionally, he criticized the Public Prosecutor's actions as “hasty,” with summonses and subpoenas issued before the Comptroller General's audit had been completed.

Hence, he suggested that prosecution without evidence was “political persecution” because the Comptroller General is the only body that can determine administrative or criminal liability.

“All the information requested, both on the formation of Botrading and on the operations that have been carried out, has been sent to the legislative commission that was investigating this case. There has been absolutely no irregularity, nor any act of corruption,” Saucedo said during a press conference on Sunday.

“The Comptroller's Office is the only body that can determine whether there is administrative or criminal liability. I think the Public Prosecutor's Office is rushing to issue summonses or subpoenas to testify when the results of the audit are not yet known,” he added.

These legal actions consisted of an “unfair demonization” of Botrading, which has generated significant benefits for the state. Botrading was created after an earlier international subsidiary, YPFB-Internacional (2019), failed to operate. Botrading's purpose was to act as a competitive intermediary in the fuel supply market, thus breaking the control of two major traders who previously dominated tenders for diesel, gasoline, and crude oil.

YPFB-Refinación claims that Botrading has generated an estimated $300 million in savings for YPFB Corporación since 2022 by introducing competition and forcing traditional suppliers to lower their prices. For example, one company was compelled to reduce its crude oil price refinement prices from US$295 to US$197 per cubic meter after Botrading began operations.

In this scenario, Botrading is necessary because Bolivia's annual purchase volume (about 75 ships) is too small to be attractive to large international refineries, and the country's internal regulations discourage direct participation by these refineries. Botrading guarantees supply, security, and lower prices, it was argued. YPFB-Refinación controls 99% of Botrading's shares, with YPFB Logística holding 1%, ensuring that profits remain in Bolivia.

However, the Public Prosecutor's Office suspects a possible scheme involving corruption, influence peddling, overpricing, and more in fuel imports. The Prosecutor's Office has conducted an inspection (not a raid, according to YPFB) and seized documents from YPFB facilities. They are also continuing to summon officials for questioning, including the general manager of YPFB Refinación.