Mercedes Mullins
Venezuela's economy is primarily based on petroleum production, and the country was the world's largest petroleum exporter from the late 1940s to 1970. Since the arrival of the pandemic in 2020, gasoline prices have been officially divided into two: subsidized and international. The price of subsidized gasoline is currently 0.60 bolivars per liter ($0.02), while fuel categorized in dollars has not seen any modifications. In border states such as Zulia and Táchira, consumers can purchase irregularly imported gasoline from Colombia at a cost of $0.80 to $0.90 per liter.
| Characteristics | Values |
|---|---|
| Price of octane-95 gasoline | 0.84 Venezuelan Bolivar per liter |
| Average price of gasoline in the world | 30.86 Venezuelan Bolivar |
| Subsidized price | 0.1 USD for the first 120 liters a month for people with a valid Fatherland Card |
| Purchases above 120 liters per month | 0.50 USD per liter |
| Price of subsidized gasoline | 0.60 bolivars per liter ($0.02) |
| Price of gasoline in border states | Up to $3 per liter |
| Price of irregularly imported gasoline from Colombia | $0.80 or $0.90 per liter |
Explore related products
What You'll Learn
Subsidized vs. international fuel prices
Venezuela's economy is primarily based on petroleum production and exploitation. Since the arrival of the pandemic in 2020, gasoline prices have been officially divided into two: subsidized and international prices. The price of subsidized gasoline is 0.60 bolivars per liter ($0.02), while the international price is $0.50 per liter of premium, high-octane gasoline.
The subsidized price is allocated through quotas available in the ‘Patria’ system, a digital platform controlled by the Venezuelan government. However, access to subsidized gasoline is worsening in the interior of the country, and in border states such as Táchira, Zulia, and Delta Amacuro, there are no gas stations offering fuel at subsidized prices. In these areas, consumers may resort to irregularly imported gasoline from Colombia at a cost of $0.80 to $0.90 per liter.
The decision to control prices has caused long queues of motorists in this oil-producing nation. The difficulties in procuring gasoline, even in a country with the world's largest oil reserves, have also resulted in low-quality fuel that has caused serious damage to vehicles due to its lower octane levels.
Despite the challenges, Venezuela's gasoline prices remain among the cheapest in the world. The low cost of gasoline once impressed the rest of the world, and the country was once the world's largest petroleum exporter. However, fluctuations in international petroleum prices and global economic recessions have impacted Venezuela's economy, along with domestic issues such as inflation, inefficient management, corruption, and a lack of skilled personnel.
Extra Fuel for Planes: How Much and Why?
You may want to see also
Explore related products
Fuel access and availability
Venezuela's economy is primarily based on petroleum production and exploitation. Since the arrival of the pandemic in 2020, gasoline prices have been officially divided into two: subsidized and international. The price of subsidized gasoline is 0.60 bolivars per liter ($0.02), while the price of octane-95 gasoline is 0.84 Venezuelan Bolivar per liter. However, access to subsidized gasoline is limited, and in some border states such as Táchira, Zulia, and Delta Amacuro, there are no gas stations offering subsidized prices. In these states, consumers may resort to irregularly imported gasoline from neighboring countries, such as Colombia, at a higher cost of $0.80 to $0.90 per liter.
The difficulties in procuring gasoline in Venezuela have led to long queues of motorists and a black market for fuel during times of fuel shortages, with prices exceeding the average international price. In Maracaibo, the capital of Zulia, an additional payment of $5 to $10 may be required for faster access to gas stations selling gasoline at dollarized prices.
The Venezuelan government has implemented a Fatherland Card system, where the first 120 liters of gasoline per month are subsidized at 0.10 USD for those with a valid card. Purchases above 120 liters are charged at 0.50 USD per liter. This has improved fuel access and availability for cardholders, but those without a card may face challenges in obtaining subsidized gasoline.
Despite having the world's largest oil reserves, Venezuela has faced challenges in procuring and supplying gasoline, impacting fuel access and availability. The quality of fuel has also been an issue, with lower octane levels causing serious damage to vehicles. The complexities of the fuel market in Venezuela have led to a dynamic and sometimes challenging landscape for motorists and consumers.
Fossil Fuels: World Energy Source
You may want to see also
Explore related products
Black market fuel
Venezuela has some of the world's biggest oil reserves, yet fuel shortages have persisted for years due to US sanctions and mismanagement. In 2020, Venezuelans reported paying above $2 per liter for gasoline, one of the world's highest rates and a stark contrast to the country's previously subsidized fuel under former President Hugo Chavez, which was essentially free. These shortages and high prices have fueled a black market for gasoline, particularly in the state of Zulia, which has bountiful oil reserves.
In the past, the black market in Zulia was supplied by pimpineros, who filled their tanks with subsidized fuel and resold it at a profit. This created a domestic black market that operated alongside the cross-border smuggling of gasoline into Colombia. However, the Zulia state government's recent efforts to phase out fuel subsidies and increase supply have significantly impacted the black market.
The number of subsidized gas stations has dwindled, cutting off the pimpineros' source of cheap fuel. Zulia's governor, Manuel Rosales, further disrupted the black market by giving control of fuel distribution to private citizens instead of security forces, breaking up networks formed by corrupt security officials. These changes have made it more difficult for pimpineros to obtain and resell subsidized fuel, causing the black market to implode.
While the black market for gasoline in Zulia is disappearing, it still persists in other areas of Venezuela. In 2020, black-market dealers in the western city of Maracaibo offered to deliver 20 liters of gasoline for $50, and Venezuelans in some areas reported paying up to $4 per liter. The partial recovery of Venezuela's oil industry and refineries has improved the availability of domestic gasoline, but the black market continues to thrive where there are fuel shortages and high prices.
Fossil Fuel Usage: An Annual Breakdown
You may want to see also
Explore related products
Fuel quality
Venezuela has some of the cheapest fuel prices in the world, with the price of gasoline being as low as $0.50 per liter of premium, high-octane gasoline, and 5,000 bolivars ($0.02 according to the exchange rate) per liter of subsidized gasoline. However, despite the low fuel prices, motorists in Venezuela often face long queues and wait for six hours or more to fill up their vehicles. The difficulties in procuring gasoline and the low quality of fuel have caused serious damage to vehicles due to lower octane levels.
The quality of fuel in Venezuela has been reported to be low, causing vehicle engines to suffer serious damage. This is due to the lower octane levels in the gasoline, which is a result of the difficulties in procuring supplying gasoline in the country. In border states such as Táchira, Zulia, and Delta Amacuro, there are even fewer options as there are no gas stations offering fuel at subsidized prices. In these states, consumers resort to irregularly importing gasoline from neighboring countries, such as Colombia, at a higher cost per liter.
The low quality and irregular supply of gasoline in Venezuela have been attributed to the country's economic crisis and the mismanagement of the economy by the Venezuelan government. The concentration of power in the hands of the ruling Socialist party, led by the late Hugo Chávez and his successor Nicolás Maduro, has resulted in growing political authoritarianism and a decline in the country's economy. Expropriations, price controls, and mismanagement have led to a 40% contraction of the economy in the past five years.
The difficulties in procuring gasoline in Venezuela have also been impacted by the pandemic, which caused a division in gasoline prices into subsidized and international prices. The subsidized price of gasoline is highly sought-after, but access to it is complicated and has led to the proliferation of irregular groups adding additional charges to motorists. The international or dollarized price, on the other hand, is more readily available but at a higher cost.
Venezuela's currency, the bolivar, is also facing extreme inflation, with the International Monetary Fund (IMF) predicting that it would reach one million percent by the end of 2018. This has made parts and maintenance for vehicles extremely expensive, further impacting the quality of fuel in the country. Despite having the largest proven oil reserves in the world, Venezuela's faltering infrastructure has led to a steep drop in oil production, with the US Energy Information Administration (EIA) predicting a decline to 1 million barrels per day in 2018 and 700,000 by December 2019.
Fuel Costs: How Much Does it Take to Fill Up?
You may want to see also
Explore related products
Fuel price in border states
Fuel prices in Venezuela have been a complex issue in recent years, with the pandemic causing supply issues and leading to the establishment of two officially authorized prices: a subsidized price and an international price. This has resulted in a varied fuel pricing landscape across the country, including in its border states.
In border states such as Táchira, Zulia, and Delta Amacuro, the fuel supply situation is particularly challenging. In these states, even finding gas stations that offer subsidized fuel prices can be difficult. As a result, consumers in these areas may have to resort to alternative sources, such as irregularly importing gasoline from neighbouring countries.
For example, in Zulia and Táchira, which share a border with Colombia, consumers can obtain gasoline from the neighbouring country. However, this comes at a cost of $0.80 to $0.90 per liter, which is higher than the subsidized price offered in other parts of Venezuela.
In Delta Amacuro, located in eastern Venezuela, the situation is somewhat different. Here, a liter of gasoline can be obtained for up to $3, but it is primarily used by boatmen for river transfers rather than by motorists.
The variable fuel prices and supply issues have led to long queues of motorists in Venezuela, as people seek to take advantage of the subsidized prices. The official subsidized price as of 2020 was set at $0.50 per liter of premium, high-octane gasoline, and 5,000 bolivars ($0.02 according to the exchange rate) per liter for regular gasoline. However, during fuel shortages, a black market for fuel can develop, with prices exceeding the average international price.
The US Fossil Fuel Addiction: Importing Energy
You may want to see also
Frequently asked questions
As of May 2023, the price of subsidized gasoline in Venezuela is 0.60 bolivars per liter ($0.02). However, access to gasoline at subsidized prices is worsening in the interior of the country.
In US dollars, the price of subsidized gasoline in Venezuela is $0.02 per liter. In border states such as Zulia or Táchira, consumers can buy irregularly imported gasoline from Colombia at a cost of $0.80 or $0.90 per liter.
The price of gasoline in Venezuela is variable and among the cheapest in the world. For comparison, the average price of gasoline in the world is $30.86 Venezuelan Bolivar per liter.
