This country’s forlorn economy has left no shortage of shortages. Milk, beans, soap, hot sauce, tampons, Tylenol — you name it, there’s a line around the block to buy what little is available. But one thing that could always be counted on in this oil-rich nation was the gasoline.
This country’s forlorn economy has left no shortage of shortages. Milk, beans, soap, hot sauce, tampons, Tylenol — you name it, there’s a line around the block to buy what little is available.
But one thing that could always be counted on in this oil-rich nation was the gasoline. Virtually free, it cost a fraction of a cent per liter. Customers usually tipped the gas attendant more money than it took to fill their tanks
Until Friday. President Nicolás Maduro increased gas prices more than 1,300 percent, to 1 bolívar per liter from 0.07 bolívars for low-grade fuel, at the same time that he instituted a long-expected devaluation of the currency.
That is the equivalent of about 10 cents per liter, or 38 cents per gallon (premium gas is 60 cents per liter now), a price that drivers outside Venezuela can only dream about. But for drivers here, it is an essential shift: from paying basically nothing to something, the first increase since 1995.
“I used to pay five bolívars to fill my tank — now it will be 200 or 300,” lamented Juan Olivera, a cabdriver. He said he would pass the additional cost on to customers, and worried that the increase could exacerbate inflation, already expected to be 720 percent this year. “Now everything will go up, and so will our crisis,” Mr. Olivera said.
Mr. Maduro took no joy in announcing the increases on national television this week. Gasoline subsidies are something few Venezuelan politicians have dared to touch. In 1989, there were riots when the government tried to raise gas prices.
This time, there were no signs of unrest in Caracas. There were long lines in the heat as drivers filled up on Thursday before the increase took effect, but many people interviewed said the move was actually too late — and too little.
“He should have gone even higher,” Alfredo Gallardo, an accountant, said of the president. “We should pay more — everyone.”
Mr. Gallardo, who drives a Toyota Yaris, recalled a recent trip to the pump where he paid “maybe five or six bolívars” to fill up with 91-octane gasoline, equivalent to about half a cent if traded on the streets here, where $1 fetches almost 1,000 bolívars.
For years, gas has flowed like water here. Actually, Ángel Ladino, a water truck operator, pointed out, “It costs me a lot more to buy one liter of mineral water than to fill the entire tank of this truck.”
Last month, the state-owned oil and gas company known as Pdvsa sent 37,401 liters to some of its local distributors, enough to fill up 830 cars. The cost: 1,645 bolívars, or $261 under the official exchange rate at the time (that’s about 31 cents per car).
A recent four-day, 1,200-mile road trip across the countryside cost about $2 in gasoline.
And the fuel prices affect air travel, too: It cost 2,640 bolívars, or $13, for a foreigner to fly last year from Caracas to Puerto Ordaz, a city more than 300 miles southeast.
José Guerra, a former central bank official who is now a legislator opposed to Mr. Maduro, said the price increase and attendant currency devaluation did not go far enough and would do little to help Venezuela pay its mounting debts abroad or for social programs at home.
“Venezuela is at risk of default,” he said. “This is not an economic plan.”
Gerardo Bolívar, 35, who works for an insurance company, does not trust the government to spend the money wisely. “What’s the point of this price increase if crime continues to rise, there is still not enough money and there’s no food?” Mr. Bolívar asked.
He is thinking of switching to 91-octane fuel from 95 to fill up his Fiat, but was worried because cheap gas ruined one of his former cars, and spare parts can be hard to come by in Venezuela.
New York Times | By MARÍA EUGENIA DÍAZ and NICHOLAS CASEY