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With The Interruption Of Bolivian Gas Shipments To Argentina, Brazil Will Be The Exclusive Destination, Increasing MS Revenue.
The export of natural gas from Bolivia to Argentina has come to an end and, surprisingly, this change may bring an unexpected benefit to Mato Grosso do Sul. The volume that was previously destined for the neighboring country will now be entirely redirected to Brazil, boosting state revenues from the Tax on Circulation of Goods and Services (ICMS).
Mato Grosso do Sul, which has seen a decline in natural gas revenues for years, is about to experience a revival in the sector. With the increase in the import of Bolivian gas by Brazil, ICMS collection, which was once a main driver of the local economy, could take a positive turn. But is this enough to sustain the state economy?
Change In The Destination Of Bolivian Natural Gas
At the end of September, the Bolivian state-owned company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) announced that it would no longer send natural gas to Argentina, a country that traditionally absorbed about 4 million m³ per day of this resource. Instead, all of this volume will now be redirected to Brazil, increasing Brazilian imports of Bolivian gas from 15 million to 19 million m³ daily.
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The Manager of Contracts and Exports at YPFB, Óscar Claros, explained that Brazil will naturally absorb this surplus, without major difficulties. “Any volume that we stop sending to the Argentine market already has a guaranteed destination in Brazil,” said Claros, emphasizing that Brazil represents a reliable and long-term market for Bolivia.
Impact On Mato Grosso Do Sul
This increase in the entry of natural gas through the Bolivia-Brazil pipeline directly benefits Mato Grosso do Sul, which charges ICMS on all the gas volume that passes through its territory. At a time when state revenues are under pressure, especially after crop failures, this boost can be crucial.
A decade ago, when Bolivia was exporting about 30 million m³ per day, Mato Grosso do Sul collected R$ 70 million monthly just from the natural gas ICMS. However, with the reduction in Brazilian imports in recent years, this revenue has dropped dramatically. Currently, the state is seeing much lower figures, but still significant for its economy.
With the interruption of Bolivian gas exports to Argentina, Mato Grosso do Sul can expect a partial recovery in its revenue, even if the figures are not as expressive as in the past. This is because, although the total volume imported by Brazil increases, it is still below the historical peak recorded a few years ago.
Why Did Argentina Stop Importing Natural Gas?
The move by Argentina to halt imports of Bolivian gas was not sudden. For more than a decade, with the discoveries of gas reserves in the Vaca Muerta region, Argentina has been seeking its energy self-sufficiency. In recent years, this transition has accelerated, leading to a reduction in the purchase of Bolivian gas.
However, this change in the energy market of the neighboring country has ended up favoring Brazil and, more specifically, Mato Grosso do Sul, which will now play an even more significant role in the distribution chain of natural gas in Brazil.
Will MS Economy Revive?
With this new dynamic, it is expected that Mato Grosso do Sul will see a positive impact on its ICMS revenue. In a scenario where other sectors, such as agriculture, are facing difficulties, the partial recovery of revenue from gas may represent a temporary relief.
However, will it be enough to compensate for the losses in other sectors? The increase in imports of Bolivian gas could be the engine that the state needs to grow again? What do you think? Share your opinion in the comments!
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