Gasoline Shortages Return in Venezuela

Gasoline Shortages Return in Venezuela

By Diálogo
August 27, 2020

Venezuela is facing new fuel shortages after a short reprieve, due to shipments of Iranian gasoline products in May. Five Iranian tankers that carried roughly 1.5 million barrels of gasoline products briefly helped relieve the oil-starved country, but long lines at gas stations, and fewer functioning fueling areas, are back.

Argus Media, which monitors the global energy market, reported that gasoline reserves, stored at the Cardón refinery, are at an all time low, with only 15,140 barrels of 91-octane grade and 1,890 barrels of 95-octane grade gasoline available, according to a confidential July 15 report from Venezuelan state oil company PDVSA that Argus Media obtained. Repairs with the help of Iran at the Cardón refinery, Argus Media added, “have had limited results so far.”

A July 6 fire and mechanical issues at the Cardón plant have delayed plans to restore fuel production, Bloomberg reported. Víctor Clark, governor of Falcon state, home to the refinery, said the fire was rapidly extinguished, however two sources familiar with the matter told Reuters in an article published on the same day that gasoline production was halted.

Production of gasoline had restarted in Cardón in mid-June with about 30,000 barrels per day of 91-octane gasoline, Argus Media said, referring to a June 14 internal PDVSA report the agency had access to. In late April, Iran delivered components and flew in technicians and equipment through Iranian state-owned Mahan Air to help resume production at the South American country’s refineries.

In early June, the Nicolás Maduro regime also put an end to decades of subsidized fuel prices, presenting a new rationing system where the price of gasoline was raised to 5,000 bolívars per liter ($0.02 at the exchange rate on July 22) — a notable increase from the previous rate of 0.00006 bolívars per liter. Another option is to pay $0.50 per liter at some 200 especially designated gas stations nationwide. On May 1, the regime increased the minimum wage to 800,000 bolivars ($3.5) a month.

With the recently imposed price hike on gasoline and with PDVSA seemingly down to its last drop of fuel, new protests have begun to erupt.

On July 17, a young man was shot to death by a member of the Bolivarian National Guard during a protest over gasoline shortages in a fishing village on Toa Island, Zulia state, human rights activists and representatives of the National Assembly (AN, in Spanish) said. According to AN lawmaker Avilio Troconiz, the gasoline sold under the government rationing system was not enough to power the boats of the islanders, who mostly subsist on fishing.

Zulia state in northwestern Venezuela borders Lake Maracaibo, and its basin covers the largest oil and gas reserves in the Western Hemisphere. Once a thriving oil region, the state has been affected by the collapse of public services with frequent blackouts and chronic fuel shortages.

According to the nongovernmental organization the Venezuelan Observatory for Social Conflict (OVCS, in Spanish), more than 4,000 protests have taken place nationwide since early 2020 due to the lack of food, gasoline, and other basic necessities. Hundreds of people were harmed during those protests and three people, including Toa Island’s 18-year-old Jose Luis Albornoz, died as a result of the violence, OVCS reported.

“The narco-tyranny continues to murder innocent Venezuelans who protest the neglect and the misery that the corrupt [people] have turned Venezuela into,” AN lawmaker Armando Armas said via Facebook. “On Toa Island, the repression is intensifying against a defenseless people.”