Photo: retrieved

Everlasting lines of cars and bikes, all honking while red-capped PDVSA workers carry machines that look like oversized phones: that’s the common sight in Mérida (and many other cities) since last week, when gas stations began installing the point-of-sale systems that will be required to pay for fuel after the price increase decreed by Nicolás Maduro two months ago, effective either on September 24, or October, 1. In true chavista fashion, that’s not even clear.  

Venezuelans pay the cheapest fuel on Earth. One U.S. dollar is enough to buy over 1,700,000 liters of gasoline, enough to fill the tanks of over 43,000 small cars. Ludicrous, but still, when Carlos Andrés Pérez tried to increase its prince by just 100%, back in 1989, he had a little case of Caracazo. Ever since, Venezuelan politicians have treated the price increase like the Voldemort of economic measures, That-Which-Can-Not-Be-Named.

The mere fact that they’re willing to take this step is a reminder of how confident the Maduro regime is on its control of Venezuelan society.

Or at least they did until 2016, when a still incipient economic crisis forced Maduro to make the first increase in 20 years. Two years later, and in harsh need for income, his government is ready to do it again and, although no official price has been announced, modest estimates suggest an increase of at least 5,000,000%. The mere fact that they’re willing to take this step is a reminder of how confident the Maduro regime is on its control of Venezuelan society.

For years, everyone thought that any government daring to increase gas prices had its days numbered. Today, folks line outside stations for hours, trying to get the last few drops of cheap gas. How’s that possible?

First off, there’s twenty years of Cuban and Chinese-engineered social control. Most of the population is now so dependant on the few things the government gives, that rebellion is too risky.  Rising the price of gas should’ve been done years ago but, as you may expect, Maduro’s move has nothing to do with sane economic policies; Venezuelans can’t afford to buy anything at the so called “international prices.” Chavismo knows it, as it also knows that the country’s empty arks can’t keep paying for the 92,000 imported fuel barrels that the inner market consumes daily.

And that’s what this whole thing is about: Gas rationing.

The critical state of gasoline imports has caused increasingly common shortages all around the country throughout the last months, but this week it reached a new low in Táchira, where the pilot plan of sale through the new payment systems had to be completely halted. That sparked a series of protests from drivers who had waited over 90 hours to fill their tanks.

That’s what this whole thing is about: Gas rationing.

This isn’t new; a rationing system has been in place in Zulia and Táchira for years, through this elaborate show Maduro is effectively expanding it all over the country. Two months ago, he asked all bus, car and motorcycle owners around the country to take part in a census using their carnet de la patria. A few days later, he announced the still mysterious increase in gasoline prices, while assuring that only those enrolled in his “automotive census” would benefit from a subsidy through their carnets, covering only 60 liters monthly. Anyone in need for more, or refusing to get a carnet, would have to pay the full price.

Picture all the bolichicos who’ll benefit from this opportunity.

As of today, gas is one of the few things you can buy in cash. To make this increase possible, gas stations must be equipped with electronic terminals, and that’s where corruption blooms: according to journalist and human rights activist, Melanio Escobar, the 8,500 Chinese KS8223 point of sale systems (that also include a fingerprint and QR scanner in 1,691 functional gas stations around the country) costed $400 each, and they will surely be handed to PDVSA by some shady company whose bank accounts will feed from nonsensical commissions.

See, this whole price thing is a textbook chavista “solution”: it’ll do nothing to improve the economy, as it doesn’t tackle the macroeconomic variables that took us here, and the Venezuelan State will keep losing money from subsidies. But since most Venezuelans can barely afford to eat, it’ll force more people to get the carnet de la patria, furtherly segregating those who refuse it, thus expanding Maduro’s control network and killing two birds with one stone: a tighter grip on people, while reducing inner fuel consumption.

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42 COMMENTS

  1. I cannot let the irony of this moment pass. The people of Venezuela by the express term of your constitution “own” the world’s greatest supply of oil. A socialist government is forced to restrict the people’s access to their own birthright, again the world’s largest supply of oil. Can anyone with a straight face argue that the people are better off with socialized oil managed by a socialist government. The people in reality dont own the oil, that is a legal fiction, and socialism cannot manage an ocean of oil successfully on behalf of the
    It keeps occurring to me that it is rational in times of abject failure for people to consider alternatives by thinking outside of the box. Yet, there is at least here on CC no discussion of an alternative to state owned oil. Venezuela biggest problem to solve is the oil problem. You can throw out the Chavistas but politicians cannot run a business that dominates Venezuela economically.

    • Socialism is collective destructiveness. It appeals greatly to people who are inherently self-destructive. Self-destructiveness comes from self-hate. Self-hate is usually justified.

      When others see the self-destructiveness, they can’t understand it because they care more about the self-haters than the self-haters care about themselves.

      Thus the only rational, reasonable response to the self-haters is containment.

  2. Is inner fuel consumption going to decrease? Or will it increase as those with the card (even those who do not own any sort of vehicle) will choose to stand in those long lines just to purchase and then resell at black market prices to everyone else. They just created another opportunity for bachaquismo.

    Also your guy’s math is out to lunch as usual. No way can you buy 1.7 million liters of gasoline for a dollar.

    • As of July 30th, the price of 1 liter of 95 octane gasoline was 6BsF, or 0,00006 BsS. One US dollar costs about 105 BsS in the black market. With the equivalent to one US dollar you could buy 1.750.000 liters. Six times more if it’s 91 octane.

      • Sorry Juan Carlos, I just verified your facts and you are right, I stand corrected. As of today we got the card reader in our one gas station town, waiting to find out how it’s going to work here, tourist town, we go through a lot of gasoline between the tourists depending on filling here to go back home after a weekend at the beach and the boat drivers and fishermen who both consume plenty and export plenty of fuel to the islands and passing fruit shops. My last fill of about 300 liters of diesel (for the power plant) and less then 200 liters of gasoline and I gave the attendant a 100 SOB note. That all changes as of today but technically I paid for 1.6 million liters that day. Sorry man, I’m HERE and I can’t wrap my head around this shit.

    • Marc, fuel consumption is decreasing, rapidly. Lemme give you an example.

      Here in this humble pueblo, there were once about 30 vehicles ferrying passengers back and forth between here and Punta de Mata. If one arrived at one of the two locations that managed the vehicles looking for a ride, if a vehicle was not available, within less than 30 minutes, one would arrive and then return to Punta de Mata. This continued all day starting at 6 AM and ending about 6 PM.

      Today, neither of those two businesses are open. There are no longer 30 vehicles ferrying passengers because most of them are parked for lack of spare parts or tires. There is a government-owned bus that makes the trip, but you have to be there in line at 3:30AM if you want the first ride out. I don’t know how many trips a day it makes, but I’m sure it’s not more than three. Sometimes it makes no trip for days when waiting for repairs.

      There are a few private vehicles that still do runs though they have to charge pretty stoutly to cover the costs. People complain, but use them anyway.

      My neighbor works for the alcalde making the rounds picking up garbage. His vehicle broke down more than 6 months ago and they have never sent him the parts he needs. He told them he’d repair the truck himself, but still nothing. So he collects his salary and does nothing.

      As you can see, with each passing day, there are fewer operational vehicles. Fewer vehciles means less fuel consumption. I’ve seen no reversal in this trend over the last few years.

      • I agree with you Rubio, there are definitely less cars on the road, hence less internal fuel consumption but the point I’m trying to make is won’t everyone with access to a product at highly subsidized (albiet in limited quantities) and access to a market who is willing to pay substancially more for that product, choose to devote their lives to that as a source of income in what is otherwise a stagnant economy? Just like what happened to the subsidized food before CLAP distribution.

        • Marc, I just don’t see gasoline smuggling in this part of the country, or even in most of the country, as a major attraction, with or without a huge price hike.

          The logistics of moving gasoline any distance at all are just too risky and difficult.

          We have a seller or two here in the pueblo, and they make a decent profit reselling gasoline illegally, but they don’t earn a living at it. And, like everything else, I’m betting they’re selling much less these days because of fewer cars, and even more importantly, fewer motorbikes on the road. It’s one thing to take your car for a 40 minute drive to fill the tank, quite another to make that same trip on a national highway on a motorbike. So motorbike owners buy locally, illegally.

          The nearest gasoline pumps to our pueblo are 30 to 40 minutes away, two different directions. There are at least 2 GNB alcabalas in either direction. At times more. Hauling enough volume of gasoline to make it worth the trip usually means using a 55 gallon drum. That means it’s easily visible, and placed on a truck, not a car. Back when I was farming and providing services for others, I routinely hauled diesel, and routinely got stopped and quizzed on what I was hauling.

          One day I asked the jefe at the GNB checkpoint at the peajes where they’re stationed if I could haul a drum of gasoline. He told me, “you can haul 2 drums of diesel without problem. Pass through here with one drum of diesel and one drum of gasoline, and I will confiscate your truck and turn it over to the courts”.

          That’s the difficulty of moving gasoline. And I’m talking about just a 30 minute drive. Imagine if I was trying to smuggle it to the south. I wouldn’t get very far before I’d be without my truck, without any cash, and probably in jail.

          Now, near the borders with Colombia and Brazil? That’s a totally different matter. The risks are worth it and the GNB are almost all in on the scam.

      • A la salud, mi señor MRubio,

        I am an engineer; I specialize in pumps. I love what I do, and I don’t really expect anyone to understand it, but here in el norte, sometimes people get it. Joselito likes his job. I’ve heard, “Joselito makes so much money,” my English translation.

        They sometimes cross themselves when they talk…the older ladies.

        Lo más importante es tratar de entender.

        You are an oil guy, I think. I wish you were with me today; I am trying to sell VFDs, variable frequency drives for a bunch of offshore pumps, and I believe I will make the sale or some version of it…but, Sr MRubio, only the engineers knew what I was talking about! The representatives from the bullsh*t little municipality might have had propeller hats on. Qué lástima, ay, mi amigo.

        Moving fresh water, treating fresh water, treating the waste thereof…it’s a calling, dammit, and it’s not sexy, and therefore Venezuela is screwed.

        I know you know. You know I know. Why are you still there, my friend?

        Joselito

  3. Also I’ve already heard of a couple of cases where some big wig military guy shows up at the gas station and nullifies the machines so they can fill their convoy of vehicles and then he reinstates it and everyone drives away. Guess those guys have the secret code for free gas. I sure hope they don’t abuse that power!!!

  4. “…increase of at least 5,000,000%. The mere fact that they’re willing to take this step is a reminder of how confident the Maduro regime is on its control of Venezuelan society.”

    This is the most insightful line in weeks of scanning news from Venezuela. I wish it to be wrong.

  5. Just a clarification question: by”inner” market, and “inner” fuel consumption, I presume the author means “domestic” market, etc. Or, does “inner” (market / fuel consumption) have another, more specific meaning in this context?

    Also, what IS the current price of gas in Venezuela, per liter?

    Thanks in advance.

  6. “..the country’s empty arks can’t keep paying for the 92,000 imported fuel barrels that the inner market consumes daily. And that’s what this whole thing is about: Gas rationing.”

    Wrong. Everyone should know by now what “this ‘whole thing is about’. Like everything else in KLEPTOzuela, it’s about STEALING more.

    Comprende? No le busquen 5 patas al gato, coño!

  7. This brings up something I never thought of:

    We see the images of people emigrating on foot, but don’t people also DRIVE out of the country?

      • You forgot the oil. Yes, they steal the used oil out of your vehicle as well if given the chance.

        I changed our oil last Friday. Filter was 350 bs and 4 liters of 15 W 40 cost 3600 bs in total (900 bs per liter). We were lucky to find the oil as most places have no supply.

        One can find oil sold from drums, but it’s often mixed with diesel or something else. One can imagine the risks of driving with that slop in your engine.

          • Waltz, if I can get into yahoo, I’ll respond tonight. If not, it’ll likely be tomorrow. I opened a gmail account and it seems to be far easier to access and use than yahoo for some reason.

            My woman just gave me her old phone, I believe it’s got WhatsApp, but not sure. My old movilnet finally cratered. I need to send my new number to John.

          • MRubio—let me know on here, I do not check email very often. Just signed up for WhatsApp a few days ago so am not familiar with it but I believe it gives automatic notifications.

    • I understand the vehicle crossing between Colombia and Vz has been closed for a couple years, so if driving would need to go via Brazil.

      • That’s the kind of information I wanted to know.

        Like, if you had a dependable running vehicle in your new country, that would seem to give you much better work opportunities.

      • I’m pretty sure you can drive from Venezuela into Colombia, you just need to pay the various “toll” stations … And your “paperwork” should have long dead US presidents’ faces on them…

      • Pilkun – I’m pretty sure you can drive from Venezuela into Colombia, you just need to pay the various “toll” stations … And your “paperwork” should have long dead US presidents’ faces on them…

  8. “To make this increase possible, gas stations must be equipped with electronic terminals, and that’s where corruption blooms: according to journalist and human rights activist, Melanio Escobar, the 8,500 Chinese KS8223 point of sale systems (that also include a fingerprint and QR scanner in 1,691 functional gas stations around the country) costed $400 each, and they will surely be handed to PDVSA by some shady company whose bank accounts will feed from nonsensical commissions.”

    OF COURSE. As I mentioned above, before reading this part of the post. When in doubt about ANYTHING the tropical Narco-Kleptocracy does, look no further: GUISO, GUISO, y mas GUI$$$O.

  9. “The mere fact that the chavistoide thugs are willing to take this step is a reminder of how confident the Chinazuelan narco-regime is on its control of Kleptozuelan Animal Farm.”

    Well said.

  10. This regime never fails to surprise with its balls and stupidity:

    Maduro recently decreed/granted citizenship to around 8,000 supposed immigrants to Venezuela. (Those are some pretty stupid immigrants, if they actually exist.)

    And he’s requesting $500 million U.S. from the U.N. to cover costs.

    Which comes out to about $62,000 a person.

    What the f?

  11. The hippopotamus in the room that Juan Carlos’ good post forgot to mention: Even a modest increase in fuel costs goes straight to the bottom-line of production costs of any goods & services still delivered in Klepto-Narcozuela. Rice to chickens to shoes to coffee, electricity, taxis, you name it. If they raise Diesel fuel, everything on trucks costs more. Including road imports, which is about 84.87% of what Kleptozuela consumes.

    To continue stealing, businesses will have to raise their prices, aka inflation, one way or another. Or shut down, which is part of the ChinoCuban master plan of business suffocation and populace impoverishment, anyway. The zombie pueblo-people will be not only more enslaved to the Carnet de la focking patria, but also even poorer, more subservient and more dependent, according to Plan. Cuban style, the cars will start disappearing, more mules and “perreras”, more bicycles and motos, adding a je-ne-sais-quoi tropical style to that sophisticated Chinese flair.

  12. If this remotely works, I know doubtful, some power groups just got castrated. Criminals do not just allow a source of income this large to be taken away. So someone just fell a few rungs down the ladder or were given another avenue of income.

    Who? What?

  13. “…increase of at least 5,000,000%. The mere fact that they’re willing to take this step is a reminder of how confident the Maduro regime is on its control of Venezuelan society.”

    This is the most insightful line in weeks of scanning news from Venezuela. I wish it to be wrong.
    —-
    Except it’s not Venezuela society who is the threat, rather surrounding countries who are starting to have to pay for Chavismo (re immigrants) and the billions borrowed via bonds which Maduro cannot repay. Probably sooner than later something will be done to force Maduro’s hand and he’ll finally have to negotiate, which will be interesting because the Chavista’s cannot negotiate. But that day of reckoning is coming – of that we may be sure.

  14. “he had a little case of Caracazo.”

    No.

    The care’mi***azo was a coup orchestrated by the castro cuban invaders, where hordes of criminals were armed by the marxist vendepatria communists to cause mass destruction and slaughter in the city and oust the government, it was NEVER, EVER, that “people got pissed”, that is a LIE.

    https://informe21.com/blog/carlos-penaloza/verdad-caracazo

    Also, the gasoline has been monopolized by the chavizta bachaquero mafias, they’re charging in pesos for even entering the station, the bachabasuras are even charging up to 70.000 pesos for 4 gallons of gasoline.

    https://www.youtube.com/watch?v=RTuT67BEu8g

    ““…increase of at least 5,000,000%. The mere fact that they’re willing to take this step is a reminder of how confident the Maduro regime is on its control of Venezuelan society.””

    Because people will NEVER protest for something they DO NOT CARE ABOUT as the price of gasoline, it’s not that “maduro has controlled society”, NO ONE IS AFFECTED, simple as that.

    And if ANYONE DARES to protest? They get a BULLET TO THE HEAD RIGHT AWAY.

  15. It never ceases to amaze how Venezuela’s “friends and allies” fleece them in every conceivable way. Check out St Vincent Prime Minister Dr Ralph Gonsalves take in the Venezuelan situation.

    http://jamaica-gleaner.com/article/caribbean/20181002/us-sanctions-venezuela-hurting-st-vincent-says-pm

    But Maduro will be happy to give away free/discounted oil if these crappy little banana republics vote on his side at the OAS. Sovereignty is the sacred creed of dictators and tyrants.

  16. Yeah, that will give all the people in Venezuela who are digging for food in the trash bins a warm, fuzzy feeling I am sure. Same for the people dying for lack of medicine. That headline ( probably fake in the first place) is just for PR.

  17. How will new gasoline prices impact transportation costs ?

    You can estimate 7 – 8 Kilometers per liter (Its around 2,36 MPG per 1 Km/Liter) as a average gasoline consumption for a 4 cylinder car in Caracas, 5 – 6 Km / Lt for an old V-8 engine sedan (typical of Maracaibo and maybe 3 – 4 Km / Lt for a 15 passenger bus with gasoline engine and partial passenger load (Please these are ballpark figures)

    For estimated cost of BsS per Kilometer, you divide BsS / liter by the estimated gas consumption in Km / Liter

    If you estimate new cost of gas as 36 BsS per liter, here are estimated costs per km for above cases:

    4 cylinder car in Caracas: (36 BsS/Liter) / (7 Km/Liter) = 5,1 BsS / Km
    Old 8 Cylinder car in Maracaibo: (36 BsS /Liter) / (5.5 Km / Liter) = 6,5 BsS / Km
    15 passenger bus: (36 BsS /Liter) / (3.5 Km / Liter) = 18,2 BsS / Km = 10,3 BsS / Km

    Will these costs affect transportation costs as a whole ?

    Lets compare cost per Km for a set of tires for a 4 cylinder car, 4 tires of $80.00 each, with an estimated life of 75.000 Kms, using 115 BsS per dollar.

    Cost per Kilometer: (4 x $ 80.00 x 115 BsS/ $) / 75.000 = 36.800 BsS / 75.000 Kms = 0.50 BsS / Km

    Compare 0.50 Bs / Km tire cost with 5.1 Bs / Km gas cost for the 4cilynder car (10 times as much …)

    For this reason, the Government has to choose very carefully the gasoline price …

    If somebody spots mistakes or errors in these numbers, please advise and I will correct

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