• Venezuela Will Bid Farewell to the Era of Cheap Gasoline

Venezuela Will Bid Farewell to the Era of Cheap Gasoline

In Venezuela, the price of one liter of No. 95 gasoline, No. 91 gasoline or diesel fuel is less than 0.1 yuan. A bottle of mineral water costs seven Bolivar (about 7 yuan), which is equivalent to 72 liters of gasoline. However, this situation is changing. President Maduro recently proposed "To Discuss the Issue of Gasoline Prices in the Whole Country." Maduro said, "The government will listen to public opinion before making a decision on the price adjustment."
The cheap oil is guaranteed by actual strength. Venezuela's proven oil reserves have reached 298.3 billion barrels, ranking top in the world. The daily production is about 3 million barrels. Currently, the price of gasoline in Saudi Arabia, Peru and Chile is respectively about 10 times, 100 times and 100 times of Venezuela’s.
Venezuela has implemented the policy of cheap gasoline for 68 years. In December 1945, Betancourt government promulgated the decree for declining gasoline price, which dropped the gasoline price in Caracas from 0.2 Bolivar to 0.1 Bolivar. The government believed that, as a powerful oil producing country, it is normal to sell gasoline to the public at international market prices. The international oil prices continued to rise and the oil production increased annually in the next 30 years, but the local people always enjoyed cheap gasoline.
Serrano, Venezuelan oil economic expert, believes that cheap gasoline makes Venezuelans develop a habit of high consumption. Venezuela's population is only about 30 million, but the vehicle population is more than 4.1 million. Statistics show that Venezuela’s per capita consumption of fuel oil is over three times than that of the average level of Latin American. The average monthly consumption for each vehicle is about 300 liters of gasoline, which exceeds that of the United States.
Today, cheap gasoline has been difficult to sustain. President Maduro has to take risks to proceed up-regulated gasoline prices. Venezuela's average daily oil comsumption has grown from 0.4 million barrels in 2002 to the current 0.73 million barrels. However, Venezuela's oil production didn’t grow for eight years and the export capacity decreased. The government faces financial issue, which makes it difficult to protect foreign exchange of basic food imports, let along large sums of money to maintain subsidies for cheap gas.
Right now, Venezuelan people hold different views for price adjustment. An opinion poll agency recently released a report, which shows that there are still 53% of people disapproving rising price. It can be seem that the government has many difficulties in coming over national economy plight by oil price adjustment.
Venezuela Will Bid Farewell to the Era of Cheap Gasoline


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