And the exchange rate?

And the exchange rate?

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Believe it… no, I’ll not write about the rumors about an appreciation of the local currency to 6 or 5 Bolivianos per 1 US$. I’ll tal about the exchange rate used to calculate the new «old» prices of gasoline and diesel oil. Since I cannot find the «decree repealing the decree» gasolinazo, all I can do is wonder what is the exchange rate used for the recalculation? and try to explain to the reader why its relevance.

Now, in principle it is useful to note that the methodology to set prices of gasoline and diesel oil in our country set margins in US dollars, then, what the regulatory agency does is calculate the price using the current exchange of rate..

Thus, when the price of gasoline was set at Bs/liter 3.74 (some years ago) it was the result of applying the exchange rate prevailing at the time (approximately Bs/US$ 8) to $ 73.8 per barrel gasoline, calculated by the regulatory body. Now, after the last change of direction December 31, 2010, gasoline resume his «old price» of US$/barrel 73.8 but thanks to the new exchange rate, should be reflected in a lower price Bolivianos, something much like the Bs/l 3.27. Where the adjustment is made? As I found out, I promise to write something.

This first reflection of the year 2011, about what happened on December 31, will be one of many that will arise, for example, how the IEHD be charged for the application for five days? Does the decree was annulled or repealed? What about people who bought expensive gasoline and diesel and now must sell at a cheap price? They are some of the questions that leaves this new fling. For now, I wish you a wonderful 2011, full of challenges and strength to face them.

Mauricio Medinaceli Monroy

La Paz, January 3, 2011

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