VZCZCXYZ0000
RR RUEHWEB

DE RUEHLP #3289 3392022
ZNR UUUUU ZZH
R 052022Z DEC 06
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC 1552
INFO RUEHAC/AMEMBASSY ASUNCION 6351
RUEHBO/AMEMBASSY BOGOTA 3675
RUEHBR/AMEMBASSY BRASILIA 7541
RUEHBU/AMEMBASSY BUENOS AIRES 4795
RUEHCV/AMEMBASSY CARACAS 2047
RUEHPE/AMEMBASSY LIMA 2120
RUEHME/AMEMBASSY MEXICO 1943
RUEHMN/AMEMBASSY MONTEVIDEO 4245
RUEHQT/AMEMBASSY QUITO 4684
RUEHSG/AMEMBASSY SANTIAGO 9269
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEANHA/FAA NATIONAL HQ WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS LA PAZ 003289 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EB/TRA JHORWITZ AND 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 EINV ETRD PGOV PREL BL
SUBJECT: GOB EQUALIZES JET FUEL PRICES 
 
REF: LA PAZ 657 AND PREVIOUS 
 
¶1. (U) In an unexpected move, the GOB issued a Supreme Decree 
November 20 equalizing jet fuel prices for foreign and 
domestic air carriers operating international routes.  Fuel 
taxes remain, but domestic carriers servicing international 
routes no longer enjoy access to reduced-price fuel, as they 
did after December 2004, when the GOB began taxing fuel 
uplifted by foreign carriers. 
 
¶2. (U) American Airlines' Country Manager Drago Komadina told 
Econoff December 5 that the company is pleased with the 
elimination of domestic carriers' price advantage but would 
like to see the GOB lower or abolish fuel taxes, which the 
company claims are higher than those in neighboring countries. 
 
¶3. (SBU) Comment: While the GOB's decision to equalize jet 
fuel prices may be good news for American Airlines, it may 
not resolve a long-standing bilateral dispute arising from 
the GOB's imposition of taxes on fuel uplifted by U.S. 
carriers (reftels).  In the absence of reciprocal tax 
exemptions, the USG must by law proceed with steps to remove 
Bolivian air carriers' current exemptions from U.S. fuel 
taxes.  End comment. 
URS