Cablegate: Gob Authorizes Jet Fuel Imports

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DE RUEHLP #0527 0582028
ZNR UUUUU ZZH
R 272028Z FEB 07
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC 2621
INFO RUEHAC/AMEMBASSY ASUNCION 6583
RUEHBO/AMEMBASSY BOGOTA 3901
RUEHBR/AMEMBASSY BRASILIA 7792
RUEHBU/AMEMBASSY BUENOS AIRES 5036
RUEHCV/AMEMBASSY CARACAS 2268
RUEHPE/AMEMBASSY LIMA 2372
RUEHMD/AMEMBASSY MADRID 3339
RUEHMN/AMEMBASSY MONTEVIDEO 4439
RUEHQT/AMEMBASSY QUITO 4913
RUEHSG/AMEMBASSY SANTIAGO 9503
RUEHUB/USINT HAVANA 0173
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUMIAAA/USCINCSO MIAMI FL
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC
RUEANHA/FAA NATIONAL HQ WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC

UNCLAS LA PAZ 000527

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STATE FOR WHA/AND LPETRONI
STATE PASS TO DOT FOR CCOLDREN AND BHEDBERG
STATE PASS TO FAA FOR CCAPESTANY AND KBERQUIST
COMMERCE FOR EALFORD AND JANGLIN
TREASURY FOR SGOOCH

E.O. 12958: N/A
TAGS: EAIR ECON PREL PGOV BL
SUBJECT: GOB AUTHORIZES JET FUEL IMPORTS

REF: LA PAZ 412

1. (U) In a February 16 supreme decree, the GOB authorized
the importation of jet fuel, empowering YPFB, the state-owned
oil company, to import enough fuel to meet domestic demand.
The decree will presumably end fuel shortages dating from
late 2006, when demand generated by increased carrier traffic
began to outpace domestic refineries' production and supply
capacity.

2. (U) American Airlines Country Manager Drago Komadina told
Econoff February 27 that he expected the decree to help
ensure regular fuel supplies and minimize flight disruptions.
February fuel shortages caused the carrier to cancel nine
flights and delay two others, resulting in millions of
dollars of lost revenues and severely damaging the carrier's
reputation. According to Komadina, the shortages worsened at
a particularly bad time, as the days preceding the annual
Carnival holiday are generally among the carrier's busiest.

3. (SBU) Comment: It remains unclear when the GOB will start
to import fuel, but Komadina has received assurances of
steady supplies and expects to continue American's
twice-daily flights indefinitely. The Ambassador and DCM
repeatedly raised the issue with Vice President Garcia Linera
and other GOB officials (reftel) and will provide additional
advocacy assistance as needed. End comment.
URS

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