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In a week when oil futures fell below zero, Venezuelans are paying more than ever for gasoline, as dire shortages fuel a booming black market.
The crisis has now spread to the capital Caracas, where priority drivers, such as doctors and police, must queue from 3 a.m. to have the opportunity to buy highly subsidized gasoline at one of the few service stations that are still open. On a good day, they’ll be able to get 20 liters after a 10-hour wait, not even enough to fill half a tank of most compact cars. Often there is not enough for everyone, and even ambulances are sidelined by shortages.
All the others flock to a black market that, in some cases, is run by the military itself, charged with safeguarding valuable stocks for essential workers. In a working-class neighborhood in San Cristóbal, near the Colombian border, a resident described scenes of members of the National Guard arriving in vans to deliver gasoline at about $ 2.50 per liter. A few weeks ago, the price was approximately $ 1.50 per liter and, in previous years, essentially nothing was paid. [La gasolina venezolana ha pasado así en la práctica de ser la más barata a la más cara del mundo o a ser a la vez la más barata, al precio oficial, y la más cara, en el mercado negro].
According to Domingo Rosales, the owner of a cafeteria in San Cristóbal, if you have enough money or if you have friends in the army or the government, there will be no problem obtaining gasoline. Otherwise, you have to suffer.
The rise in prices is due to the collapse of global oil futures by quarantines that have undermined all demand, leaving countries from the United States to Russia filled with unwanted oil. Crude futures in New York for May delivery fell below zero for the first time on April 20.
For the past seven years, Venezuela has been on a long slide toward collapse, with residents who have faced countless indignities in their daily lives, from grave robberies to receiving prescriptions for pet medications. Still, running out of gas in an oil-rich country is a painful blow, both financially and psychologically. A decade ago, oil was the power behind then-President Hugo Chávez’s ambitions to transform his nation into a socialist counterweight to American capitalism. Venezuela has the largest oil reserves in the world.
The shortage is due to a combination of factors, including mismanagement and corruption at state oil company PDVSA. But the real blow came with U.S. sanctions starting in 2019 that prevent Venezuela from exporting its crude or importing derivatives.
As the shortage worsened, the government handed over control of service stations to the military last month. At gas stations, the official subsidized price is still so close to zero that they often give away fuel in exchange for cookies instead of cash.
That creates the opportunity to make a profit by selling on the black market at high margins. Daniel Guerra, a 31-year-old taxi driver, was driving through a remote area of Caracas when he saw a group of teenagers selling gasoline on the street. He said they had a plastic container and without thinking twice paid them $ 10.
Last week, a resident of a high-class neighborhood in Caracas was arrested for building an underground gas station and pumps in the yard at his home. Police seized about 3,000 liters of fuel and the owner faces smuggling charges.
The most recent shipment of imported gasoline arrived in late February, according to people with knowledge of the situation and vessel tracking data collected by Bloomberg. No new ships have arrived since then, although Iran is considering sending shipments, according to people familiar with the matter.
If the country does not receive another load soon, the gasoline crisis will spread beyond its current limits in the coming weeks, according to Joel Guedes, director of the IPD Latin America LLC consultancy.
PDVSA, which owns one of the largest refinery complexes in the western hemisphere, has not produced a finished drop of gasoline since November 2019, Guedes said.
Some drivers, unsure if they will be able to find more gas or if the nation will run out of fuel, have started to stockpile anywhere they can. Larry Orellán, a 33-year-old motorcycle taxi driver, said his father has gasoline stored in the tank of a broken down truck, and is considering using a damaged motorcycle he has at home to do the same. (Venezuela is full of unusable cars, trucks and motorcycles because the dollarization has resulted in the fact that most people cannot afford to buy spare parts for repair.)
Fuel storage is leading to other problems. Less than two weeks ago, an apartment building in Caracas caught fire and destroyed more than 30 cars in the underground parking lot after fuel drums exploded in the basement, according to local media reports.
Freddy, a delivery man for a large drugstore chain who preferred not to give his last name, said the only way he can fill his motorcycle tank is by paying a soldier guarding a gas station near his home about $ 2 for liter. Freddy says that if he doesn’t work, he can’t buy food for his family.
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