oil industry

Smuggled gasoline rescues Venezuelans running on fumes

Agence France-Presse

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Smuggled gasoline rescues Venezuelans running on fumes

Men offer gasoline for sale on the streets of Maracaibo, Zulia State, Venezuela, on August 25, 2020, amid the coronavirus pandemic. - In oil producing Zulia state, a black market of gasoline brought from Colombia flourishes. (Photo by Luis BRAVO / AFP)


In just a few weeks, Venezuela goes from being 'the world's cheapest to the world's most expensive country for gasoline'

Cheap gasoline smuggled over the border from Venezuela once flooded eastern Colombia. These days, as desperate Venezuelans run out of fuel, the contraband is moving in the other direction.

For the first time, Colombian gasoline is cheaper and is being smuggled across the border to fuel vehicles in western Venezuela.

“It’s a lifeline,” says Roger, a fruit-and-vegetable vendor in Santa Cruz de Mara near Maracaibo, in western Venezuela. “Without it, nothing would move here anymore.” 

Venezuela, which has the world’s largest oil reserves, is almost entirely dependent on revenue from its oil exports at a time that global prices are low.

And 6 years of recession, hyperinflation, corruption, and mismanagement means production has fallen to a fraction of the 3.2 million barrels per day (bpd) produced just over a decade ago.

Recent Organization of the Petroleum Exporting Countries figures showed production had fallen to just 393,000 bpd.

Venezuelan paradox

“At a time when the world is literally swimming in gasoline” from pandemic-related surpluses, Venezuela’s shortage is a cruel paradox, said Caracas economist Jose Manuel Puente.

Venezuelan refineries have the capacity of producing 1.3 million bpd of gasoline, but are facing trouble due to mismanagement and corruption, according to experts and union leaders.

A top-up from ally Iran, which shipped 1.5 million barrels of gasoline in May and June, has run out. Even the normally well-supplied capital Caracas is feeling the pinch.

Smugglers have quickly adapted to the fuel crisis.

One smuggler, who gave his name as Marco, says he is helped by bribes to contacts in the Venezuelan military and police.

“They let us know what days we can cross the border,” he told Agence France-Presse.

“When we get the green light,” the traffickers leave from the Colombian town of Maicao. “There are many routes, but the route is decided each time” by a network of so-called “moscas” or police informants, he said.

At the border, the smugglers use illegal cross-border trails known as “trochas” to slip into  Venezuela.

President Nicolas Maduro blames the shortages on United States sanctions, including sanctions against state oil company PDVSA.

Many analysts however say the regime has failed to invest in or maintain oil production infrastructure, and point to years of government corruption.

Maduro recently raised the price of a liter at the pump to $0.50 at some gas stations, where once it was practically free. Other outlets have maintained symbolically low prices but only for holders of the “Fatherland Card,” giving them access to government-run food distribution programs.

Chronic shortage

The chronic shortages have forced motorists onto the black market and its higher prices, of between $2 and $3 a liter. In neighboring Colombia, gas retails for around $0.60 a liter.

In the space of a few weeks, Venezuela “has gone from being the world’s cheapest to the world’s most expensive country for gasoline,” said Puente.

In a rundown area of Maracaibo, contraband Colombian gas is sold openly on the roadside, where vendors wave cardboard signs with prices. A 20-liter jerrycan can run from $25 to $30.

“I never thought that our country would one day have to buy contraband Colombian gasoline or import it from Iran,” says Jose Ochoa, a refrigeration technician. 

“I never thought we would fall so low.” – Rappler.com

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