Venezuela nears end of the road for gasoline subsidy

[Bacchus4.0]

http://www.theguardian.com/world/2014/jan/27/venezuela-petrol-subsidies-cheap-gas

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"Cheaper than air," said the driver of a Chevy Tahoe, after paying more to fill a tyre than the tank.

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Unlimited access to virtually free gasoline has become something of a Venezuelan birthright, and raising prices is considered the third rail of Venezuelan politics. Deadly riots broke out in 1989 at the possibility of a price hike. Not even Hugo Chávez, who died last March after 14 years in power, dared to mess with the pumps.


But with annual inflation topping 50% and the government burning through hard-currency reserves, Chávez's successor, Nicolas Maduro, appears to have no choice. The government is spending more than $12bn a year to subsidise domestic gasoline sales, Venezuelan energy officials say. The projected price hike is likely to push gas closer to 17 cents a gallon, at unofficial exchange rates.
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Global energy surveys rank Venezuela's proven oil reserves at nearly 300bn barrels – even bigger than Saudi Arabia's. Venezuela is the world's 13th-largest producer, and 40% of its shipments go to the US, despite more than a decade of strained relations.

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"What Venezuela really needs to do is stop giving oil away to other countries like Cuba," Flores said, echoing criticism from members of Venezuela's opposition who argue that the country should cut off subsidised oil to Havana, and other leftist political allies, before jacking up pump prices at home.