Brazil's state-owned energy company Petrobras announced in a statement on Wednesday that it will stop distributing oil in Bolivia on July 1.

The decision was a response to Bolivia's decree to nationalize the country's gas reserves, said the statement, which was released a day after Bolivian Minister of Planning Carlos Villegas said Petrobras was the only company that did not respect the country's hydrocarbon nationalization.

The relations between Petrobras and the Bolivian government have been tense since May 1, when the country decided to nationalize its fossil fuel resources. Petrobras, which produces 60 percent of the natural gas that Bolivia exports to Brazil, has been hard hit by the decision.

Petrobras said until June 30 the company will guarantee oil supply to gas stations in Bolivia.

The subsidiary of Petrobras in Bolivia, which started activities in the neighboring country in 2001, had a five-year contract with the Bolivian government.

Bolivia's state-owned company Yacimientos Petroliferos Fiscales Bolivianos is now responsible for the domestic hydrocarbon sector.

Source: Xinhua