Venezuela boosted tariffs and levies at its seaports for the first time since nationalizing them in 2009, a move that may accelerate the world’s fastest inflation.
The government set a single rate for services in all ports in order to improve and promote port activity, according to a resolution published today in the Official Gazette. Prices at Puerto Cabello, the country’s largest, will rise an average of 250 percent, according to the port’s chamber of commerce.
Venezuela, which imports about 70 percent of its food needs, may see “spiraling inflation” as a result of the price adjustments, the chamber said in a report published on its website. Monthly inflation accelerated 2.5 percent in May from April and 22.8 percent from a year earlier, according to the central bank.
“These tariffs will have an impact on the Venezuelan economy through the effect they will have on the final cost of imported products for the consumer,” the chamber said.
The cost for a ship to land and dock for 12 hours with a cargo weighing up to 6,300 tons rose 365 percent, to $1,485, according to the chamber’s calculations, based on prices published in the Gazette. The cost of storing a 40-foot empty container in a dock rose 333 percent, to $20 from $6, according to the chamber’s calculations.
The new prices will take effect June 24.
The government, by raising port fees to better reflect costs, is making it a priority to have sufficient goods on shelves rather than fighting inflation ahead of elections next year, said Boris Segura, Latin America analyst at Nomura Securities International. While the government may absorb the higher fees for its own imports, price adjustments will be passed on to consumers for goods imported by the private sector, he said.
“In the case of the private sector, profit margins have been squeezed so it’s doubtful that private importers are going to swallow those increased costs,” Segura said in a phone interview from New York.
Venezuela nationalized all the country’s seaports and airports in June 2009, creating a new organization to oversee them that is run in co-operation with Cuban advisers.
Prior to the nationalization, private companies that handled loading and unloading set their own prices at ports which were administered by local governments. Some had not been adjusted since 1995, said Jose Sabatino, a director at the Puerto Cabello Chamber of Commerce.