Supreme Decree No. 5716 of 18 September 2026 establishes a new regime for determining the price of diesel fuel in Bolivia, replacing the previous system with a mechanism linked to the economic cost of supplying and importing the fuel.
The decree initially sets the regulated final price of diesel at Bs 17.95 per litre, including Value Added Tax (VAT), and introduces a calculation methodology and an adjustment band for future price changes.
New price and calculation methodology
Upon publication of Supreme Decree No. 5716, the regulated final price of diesel was set at Bs 17.95 per litre.
One of the main changes introduced by the decree is the replacement of the previous fixed price with a regime based on the Import Parity Price (IPP).
The methodology takes into account various components of fuel supply, including the international reference price, transport, storage, inspection, financing costs, customs duties and other costs associated with importation and marketing.
The 5% adjustment band
The decree also introduces a five per cent (5%) adjustment band.
The regulatory authority must calculate the reference price on working days. While the variation remains within the established range, the regulated price will not change. If the variation exceeds the band’s limit, an adjustment must be made in accordance with the applicable procedure.
Consequently, Bs 17.95 per litre is not necessarily a permanent price, but the initial value under a new system that allows subsequent adjustments.
Impact on businesses
The new regime is particularly relevant to businesses whose costs are directly or indirectly linked to fuel consumption.
Sectors that may experience a greater impact include:
- transport and logistics;
- construction and civil engineering works;
- industry;
- mining;
- agriculture;
- product distribution and sales; and
- activities requiring heavy machinery or intensive transport.
The economic effect is not limited to businesses that purchase diesel directly. Higher fuel costs may affect transport prices, materials, services and other components of the production chain.
Do higher diesel prices allow contracts to be amended?
From a contractual perspective, an increase in fuel prices does not automatically entitle a party to unilaterally change the price under a contract.
Each case requires a review of matters including:
- price adjustment or review clauses;
- the contractual allocation of risk;
- the nature and duration of the contractual relationship;
- the actual weight of fuel in the cost structure;
- the circumstances existing when the contract was entered into; and
- the applicable legal provisions.
This analysis is particularly relevant to construction, transport, supply and materials procurement contracts, as well as fixed-price or long-term contracts.
A business facing a substantial increase in costs is not necessarily entitled to pass that increase on to its counterparty immediately. Equally, a request for review should not be rejected automatically without first examining the contract and the specific circumstances of its performance.
Subsequent amendment introduced by Supreme Decree No. 5729
Supreme Decree No. 5729 of 25 September 2026 subsequently introduced additional provisions concerning the application of the new regime.
These include extending to ten (10) working days certain deadlines granted to the Ministry of Hydrocarbons and Energy to regulate the cost structure and the operation of the adjustment band.
It also exceptionally authorised Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), through contractual amendments and where appropriate, to adjust unit prices linked to diesel in its transport contracts.
This provision is specific to the contracts covered by the decree and does not constitute a general authorisation to automatically adjust prices under private contracts.
Reviewing existing contracts
In this new context, businesses should identify contracts in which fuel represents a significant cost component and review whether they provide adequate mechanisms for dealing with future variations.
For new contracts, particularly medium- or long-term agreements, it may be advisable to expressly establish price review mechanisms using objective parameters, adjustment formulas, variation thresholds or renegotiation procedures.
An appropriate contractual allocation of risk can provide greater predictability in commercial relationships and reduce potential disputes arising from significant changes in performance costs.
REINICKE OSTRIA – ESTUDIO DE ABOGADOS S.R.L. recommends an individual review of contracts that may be affected by the new regime before changing prices, accepting or rejecting adjustment requests, or initiating renegotiations.
This publication is for information purposes only and does not constitute legal advice on any particular matter.
