Fuel Shortage in Venezuela Growing Worse

The state oil company in Venezuela was trying desperately to fill gasoline supplies in many neighborhoods in the capital of Caracas on Thursday as cars were lined up at gas stations amidst a shortage of fuel that is growing worse.

While the state run Petroleos de Venezuela SA (PDVSA) said that the situation was normalizing and placed the blame on long lines at gas station on transportation delays, the country’s opposition party says that the oil company needed to lower its costly imports of fuel as it attempts to preserve its dwindling cash on hand to pay foreign debt.

Fuel trucks could be seen in many neighborhoods across Caracas resupplying gas stations following a report in El Nacional a local newspaper of widespread shortages throughout the South American country.

Some people waiting in line said they had been there over 30 minutes and there were still three or four cars in line in front of them.

As the crumbling refineries of the company cannot meet local demand, imports have placed a big financial burden on the nation as it buys fuel abroad at the current market prices but sells it domestically for only pennies per gallon in Venezuela.

State run oil producer PDVSA has been lowering the imports that have lost money as it prepares to make bond payments of $2 billion that are due in April, said opposition lawmaker Jose Brito who sits on the oil commission in the National Assembly.

Brito said the government was not importing a sufficient amount of oil because they are trying to save enough money to make debt payments. He called the situation unbelievable in a country that produces oil.

A vice president with PDSVA said earlier this week that the oil company has enough supply at its refineries and is working on increasing its shipments so distribution will stabilize after delays in transportation caused long lines in four states in the country.

Hunting for gas is not the only headache many consumers face following years of steep economic contraction and inflation that reached triple-digits have produced a shortage of everything from bread to medicine.

Long accustomed to the cheapest gasoline in the world, with the largest oil reserves in the world, Venezuelans now are worried they will now start to lack gas.

Venezuela has had to increase imports of refined gas and components the last few years as its refinery utilization rates dropped due to an infrastructure in deep deterioration.