2023-11-12 20:05:04
Bent behind the wheel of his old Ford Fiesta, Paolo waits his turn. The father of the family yawns: he got up at 4 a.m. to go fill up at the Mesuca gas station, in Petare, in the eastern suburbs of Caracas. At 8 a.m., he still hasn’t been able to access the pump. “I need to put diesel in the car, otherwise I can’t start delivering to restaurants”moans the 47-year-old man.
A country with the largest proven oil reserves on the planet – almost 25%, more than Saudi Arabia and Iran – Venezuela has been facing chronic fuel shortages for around ten years. Due to lack of supply, state-subsidized service stations do not open every day. At 0.60 bolivars per liter, approximately $0.02, they are stormed by motorists as soon as they learn that the precious fuel is available again.
A production that collapsed
Paolo had been waiting for the good news for several days. “I’m in a WhatsApp group where we pass messages to each other as soon as there’s fuel”, indicates the man who is carrying jerry cans in his trunk. Everyone is entitled to 120 liters of fuel per month, at a paltry cost of 72 bolivars, or around $2.50. Everyone rushes to collect their share at once for fear that stocks will run out in a few hours. Soldiers, weapons in hand, organize the wait. “They make you go faster if you give them a few dollars”breathes Paolo.
An oil giant at the end of the 2000s with around 3.3 million barrels produced daily, Venezuela saw its production collapse. “Our actual refining capacity is 160,000 barrels per day while internal demand requires 240,000”explains Rafael Quiroz, specialist in the Venezuelan oil sector.
The economist attributes this deficit to “structural problems” which undermine the country’s oil industry: “There has not been the investment necessary to maintain production. Some refineries have not received any maintenance for several years. » It indicates that refineries are only working at 10% of their maximum capacity.
Relief from American sanctions
A slim hope reappeared on October 17, when the United States announced a reduction in the sanctions applied since 2019 against the Chavista regime. Concretely, Venezuela can once again produce, refine, sell and export its oil on traditional markets. Attracting foreign companies and capital to revive Venezuela’s oil industry should also prove easier.
The new agreement covers a period of six months and may be extended if « Venezuela respects the commitments made under the electoral agreement »which predicts a presidential election in 2024, warns the US Treasury.
Venezuela: the uncertain return of those who had fled the crisis
From there to eliminating the endless queues in Petare and elsewhere in the country? Surely not. “Venezuela’s oil infrastructure is in too poor condition to be able to quickly increase production quantities”recalls Rafael Quiroz.
In the short term, industry experts estimate that Venezuela can increase its daily production by 200,000 barrels. Too little to weigh on international markets or avoid shortages, even if President Nicolas Maduro says that “Venezuela enters the oil market again and with force”. On the other hand, the country will no longer be obliged to sell its oil at a discount to compensate for the impact of American sanctions.
Outside of Caracas, the situation remains alarming. A newspaper investigation Momentum reveals that in some states, the wait at the pump can stretch up to 72 hours. The wealthiest Venezuelans have found the solution: dollars in their pockets, they stock up at the so-called stations “international” which offer fuel at $0.5 per liter. Since 2019 and the recognition of the dollarization of the economy, these stations have flourished throughout the territory. A luxury that Paolo, like millions of Venezuelans, cannot afford.
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