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Venezuela: Subsidized Gasoline Prices Set to Increase

By: PanAm Post Staff - Dec 18, 2013, 5:54 pm

EspañolThe Venezuelan government has publicly acknowledged that its gasoline subsidies represent losses close to US$12.6 billion dollars per year, according to the words of petroleum and mining minister and current president of PDVSA, Rafael Ramírez. The losses stem from the difference between the selling price of gasoline and the cost of production: 0.097 Bsf. per liter price for the last 17 years versus close to 2.7 Bsf.

That disparity leads to losses of close to VEN 86 million Bsf. per day, and the minister explained that “in this country people do not pay for gas, because PDVSA pays to sell the gas. With diesel the situation is worse.” PDVSA needs to recover its production costs.

Ramírez said that Venezuela sells the cheapest gasoline in the world, and blamed the citizens for squandering the supply.

“There is no prudence regarding reducing gasoline consumption, because it is not paid in the country.” Finally, he pointed out that “this grant does not favor the people in any way; rather, it has fostered Hummer parades and vehicles with greater fuel consumption.”

Representative María Corina Machado was critical of the measure, saying: “On what moral grounds does he claim that the Venezuelan people should pay for the gifts from the government to the Cuban regime? This is not taking away from the rich and giving to the poor; the government is taking away from the Venezuelans to give to Castro’s people.”

Machado also speculated regarding what will happen alongside the increase: “The cherry on the cake of the Cuban bundle is the increase for gasoline, followed by the increase in electricity rates and a devaluation of the bolivar, which started yesterday and has already been announced by Ramírez. This will mean a shortage for next year, hyperinflation, and a certain situation of chaos, distress, anarchy, and misery for all Venezuelans.”

Source: El Universal.