Weekly Report - 10 January 2006

BOLIVIA | Higher prices & taxes for gas. Vice-President-elect Alvaro Garcí­a Linera travelled last week to Argentina to open discussions on the raising of the price Argentina pays for its imports of Bolivian gas. He said the aim was to 'work towards a regional market price which will fundamentally benefit the country [Bolivia].' Prompted by a severe energy crisis, Argentina resumed importing gas from Bolivia in early 2004, after a four-year suspension. At the time, President Carlos Mesa agreed to what he called a 'solidarity price' of US$0.98 per million btu, substantially lower than the US$1.60 which Brazil was paying. A year later Mesa was able to negotiate a progressive increase which would roughly align both prices. During the recent electoral campaign all candidates agreed that prices should rise to the levels prevailing in developed countries, of more than US$10/m btu.