Venezuela Opposition Say Maduro Plans Gasoline Hike Next Month

  • Opposition lawmaker says move should be debated by Congress
  • Venezuela gasoline is the cheapest in the world at 6 cents

Venezuela’s opposition believes President Nicolas Maduro will raise gasoline prices next month and wants a debate in the the National Assembly before any unilateral decisions are announced, Jose Brito, a lawmaker on the oil committee, said in an interview at Bloomberg’s office in Caracas.

“The government wants to strategically announce a gasoline price hike by the Friday before the Carnival holiday, along with an announcement of economic measures,” said Brito, a member of the opposition Primero Justicia party. “We at the oil committee will request a debate of this matter at tomorrow’s national assembly session.”

Venezuelans enjoy the cheapest gasoline in the world, paying 6 cents a gallon at the official exchange rate. For those who have access to dollars and can change money in the black market, fuel is essentially free. Caracas-based state oil company Petroleos de Venezuela SA incurred $15.2 billion in expenses and costs in 2013 to maintain the country’s domestic fuel subsidy.

Any discussion about gasoline prices must be accompanied by talks about continuing Petrocaribe, said Brito. Former President Hugo Chavez launched the regional initiative to provide subsidized oil to neighbors to gain political support. Crude is sold at below-market rates and can be paid back in anything from medical services to beans.

“If those barrels sent to Petrocaribe could be placed in the international market, we wouldn’t need to increase gasoline prices,” said Brito. “If we have to ask the people to make sacrifices, we should suspend Petrocaribe as well.”

Fuel prices in Venezuela haven’t budged in 20 years. Food and gasoline price rises in February 1989 sparked nationwide protests, paving the way for the late President Hugo Chavez’s rise to power. The last price increase was in 1996. Fearing a repeat of the so-called Caracazo riots, Chavez never boosted gas prices during the 14 years he served as president. PDVSA’s gasoline production cost is 2.7 bolivars a liter, ex-company President Rafael Ramirez said in late-2014 prior to his departure from the company.

Venezuela’s Information Ministry and the media department at PDVSA didn’t immediately respond to e-mails seeking comment on the potential gasoline price hike.

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