November 22, 2006


Divided Venezuelans United on Costly Policy of Cheap Gas (Juan Forero, 11/23/06, Washington Post)

In this famously polarized country, where President Hugo Chávez's government and a strident opposition never have anything good to say about each other, there is agreement about at least one thing: gas. The country's policy is unalterable, a hip-hip-hurrah for cheap fuel that is seconded by truckers, industrialists and suburban soccer moms in their SUVs.

"As an oil country, the state has the responsibility to guarantee energy and preserve the price of gasoline as it is," said Gabriela Ramírez, a pro-Chávez lawmaker in the National Assembly. "You raise the price one bolivar and you affect the economy because the price of bus tickets goes up, everything becomes more expensive."

Everyone in Venezuela also remembers what happened when prices were dramatically increased in 1989 -- an uprising that left hundreds dead. As the government and its foes prepare for the Dec. 3 presidential election, which most opinion polls show Chávez will win handily, the themes of the day range from Venezuela's expensive aid programs overseas to skyrocketing crime to the government's popular social programs. No one -- no one -- is talking about cheap gasoline.

"Of course, cheap gas is good," said Jesús Espinoza, a truck driver, perplexed that anyone could consider low gasoline prices debilitating. "In a country with so much petroleum riches, you cannot have expensive gasoline. It would be a contradiction."

One downside to the cheap gas, though, is that it eats up about $1 billion in subsidies and another $5 billion that Venezuela fails to earn by not selling the oil on the world market, where a barrel reached a high of $78 this year. It generates the horrendous traffic jams that mark this city, where 2 million cars snake along at an average speed of 9 mph. It also has made the sale of contraband gasoline to neighboring Colombia a major criminal enterprise.

The policy, critics say, is a vicious circle that feeds on itself as Venezuelans seeking investments, ever mindful that filling up a tank costs less than a ham sandwich, buy cars at a record clip.

Posted by Orrin Judd at November 22, 2006 11:58 PM
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