Venezuelan President Nicolas Maduro on Wednesday announced a currency devaluation and gasoline price increase in an attempt to shield the nation’s oil-dependent economy from collapse and fend off mounting calls for his ouster.
Gas prices are to jump by more than 60-fold — the first increase of any kind in about 20 years. Yet drivers will still be able to fill their tanks for just a few cents in the South American nation where gasoline has long been so heavily subsidized that it is virtually free.
The price of premium gasoline is to rise from 0.1 bolivar a liter to 6 bolivars per liter, while regular gasoline is to jump from 0.07 bolivar to 1 bolivar per liter. By contrast, a beer costs about 300 bolivars, while a basket of strawberries goes for 800 bolivars. Calculated at the widely used black market exchange rate, the price per liter will be a few US cents.
Maduro said the increased gasoline revenue would finance the government’s social programs.
“We must charge for gas,” he said. “I ask that the people welcome and support this new system.”
Gasoline prices are a touchy issue in Venezuela, where memories are still vivid from 1989 riots in Caracas that erupted after the proposal of a series of austerity measures, including an increase in gas prices.
Maduro also announced that the strongest of the nation’s official exchange rates, used for essential goods such as food and medicine, would be changing from 6.30 bolivars to the US dollar to 10 bolivars to the US dollar. Meanwhile, the bolivar is worth about 1,000 to the US dollar on the black market.
The economic measures come as Maduro fights for his political survival.
Oil accounts for 95 percent of Venezuela’s export earnings and plummeting crude oil prices have helped push the state-led economy into a deep recession, with chronic shortages, empty store shelves and soaring inflation.
Opposition leaders took control of Congress last month for the first time in more than a decade and have been on a collision course with the socialist president ever since.
Lawmakers are weighing several options for removing Maduro from office, including shortening his term and calling a constitutional referendum, but many fear the Supreme Court, which has not ruled against the executive branch since former Venezuelan president Hugo Chavez took office in 1999, would simply overturn those efforts.
Opposition leaders quickly dismissed Wednesday’s measures as insufficient to right the flagging economy.
Earlier in the day, two-time opposition presidential candidate Henrique Capriles called for a presidential recall referendum.
To force a recall referendum, the opposition would need to gather nearly 4 million signatures and if a referendum was held, the president would be removed only if the number of anti-Maduro votes exceeded the number of votes he got in the 2013 election.
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