Thu, Mar 14, 2019 - Page 9 News List

Gasoline scarcity could turn crisis into catastrophe in Venezuela

By Scott Smith and Clbyburn Saint John  /  AP, MARACAIBO, Venezuela

Marin Mendez leaned a shoulder into his rusty Chevy Malibu, rolling it forward each time the line of vehicles inched closer to the pump. Waiting hours to fill up, he said, is the high cost he pays for gasoline that is nearly free in socialist Venezuela.

“You line up to get your pension, line up to buy food, line up to pump your gas,” an exasperated Mendez said after 40 minutes of waiting in the sweltering heat in Maracaibo — ironically the center of the country’s oil industry — and expecting to be there hours or days more.

“I’ve had enough,” he said.

Lines stretching 1km or more to fuel up have plagued this western region of Venezuela for years — despite the country’s status as holder of the world’s largest oil reserves. Now, shortages threaten to spread countrywide as supplies of gasoline become even scarcer amid a raging struggle over political control of Venezuela.

US President Donald Trump’s administration hit Venezuela’s state-run oil firm Petroleos de Venezuela SA (PDVSA) with sanctions in late January, in a sweeping strategy aimed at forcing Venezuelan President Nicolas Maduro from power in favor of opposition leader Juan Guaido.

Doomsday predictions immediately followed — mostly fueled by Maduro’s opponents and US officials — that Venezuela’s domestic gasoline supplies would last no more than a week or so.

That has not happened yet, but more misery is feared as expected shortages have economic implications far beyond longer gas lines, turning Venezuela’s crisis to a catastrophe.

“Crucially, it will lead to more shortages of food and basic goods,” said Diego Moya-Ocampos, a Venezuela analyst with the London-based consulting firm IHS Global Insight.

That is because the vast oil reserves that once made Venezuela Latin America’s wealthiest country provide the primary source of the hard currency it needs to import food and other goods.

Today, its basic infrastructure — roads, power grid, water lines and oil refineries — is crumbling. Food and medicine, nearly all of it imported, are scarce and expensive as Venezuela endures the world’s highest inflation.

Critics blame Venezuela’s collapse on the government’s two decades of self-proclaimed “socialist revolution,” which has been marred by corruption and mismanagement, first under former Venezuelan president Hugo Chavez and now under Maduro.

The US sanctions essentially cut PDVSA off from its Houston-based subsidiary Citgo, depriving it of US$11 billion in hard currency from exports this year that US officials say bankrolled Maduro’s “dictatorship.”

US officials have turned control of Citgo over to Guaido’s interim government, essentially expropriating the company, a strategy Venezuela’s socialist government employed for years by seizing private companies.

Opposition leaders bent on ousting Maduro say they recognize the US crackdown on the oil sector is likely to be painful for their people, but that the measures are necessary to keep Maduro’s government from further looting Venezuelan resources.

Meanwhile, a defiant Maduro says the economic war led by the White House is a precursor to a military invasion to oust him from power and seize Venezuela’s vast oil wealth.

Maduro tweeted a warning on Wednesday that nobody should be fooled by apparent gestures of assistance, alluding to tonnes of US humanitarian aid he recently blocked from entering.

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