Venezuela crisis: Maduro to curb fuel subsidies

Venezuela’s president has said its subsidised fuel prices should rise, to stop smugglers cheating the country out of billions of dollars.

“Gasoline must be sold at an international price to stop smuggling to Colombia and the Caribbean,” Nicolás Maduro said in a televised address.

Like many oil producing nations, Venezuela offers its citizens heavily subsidised petrol.

A fuel price rise in 1989 caused deadly riots in the capital, Caracas.

What’s behind the move?
Venezuela’s economy is in freefall, with the International Monetary Fund predicting inflation rates will reach a million percent this year – but the price of fuel has barely changed.

The price of a litre of petrol in Venezuela currently stands at 1 bolivar. On the black market, Venezuelans pay more than 4m bolivares for one US dollar.

That means that for the equivalent of one dollar, Venezuelans can fill the tank of a medium-sized car about 720 times.

Smuggling the subsidised fuel from Venezuela into neighbouring countries, where prices are much higher, is big business.

Venezuela loses $18bn to fuel smuggling annually, according to government figures. President Maduro says adapting Venezuelan fuel prices to international levels will stamp out smuggling.

The move is part of a wider plan to increase government revenue in the face of falling oil production, Venezuela’s main export income.


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