Increasing Gas Prices: Chavismo’s Wrong Solution to Huge Problems

The price of what had been the cheapest gas on Earth was supposed to increase recently. A long-overdue measure that Maduro assures will improve the economy, but will only deepen the fierce control the State has over the average Venezuelan life.

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.