If you’re lucky, you’ll be able to fill your gas tank in less than an hour. There are closed gas stations everywhere, and others with endless lines where people wait for hours or even days to buy gas. The crisis became more acute at the beginning of December, with the paralysis of the Amuay refinery after a fire destroyed a key processing unit. Answers from the government have not been forthcoming.
It is not known whether the situation will improve in the next few days or weeks. U.S. sanctions, internal political and economic strife, and a black market poised to exploit the government-regulated gasoline price of approximately $0.004 per gallon have combined to produce an untenable situation. A driver may wait for hours in line, and then leave more as a tip to the pump attendant than they paid for the gas.
About ten years ago, oil production in Venezuela was more than 3 million barrels per day. According to CEIC data reported by Organization of Petroleum Exporting Countries (OPEC), production dropped from 1,151,000 in January to 697,000 barrels per day in November 2019. Extraction, storage and distribution challenges have put Venezuelans in an unprecedentedly difficult position on multiple fronts.
And the situation may deteriorate still further. Caracas is the only city in Venezuela with an extensive subway system, but even there the lack of maintenance has damaged the quality of service. A national railway project, which began with a multi-million-dollar investment, was never completed and is now abandoned. The transport of people and goods is completely dependent on gas-powered vehicles.
This emergency comes at a crucial time for Venezuela, which is still suffering not only from food shortages, but from hyperinflation such that the national minimum wage is sufficient to buy only a few basic products. The gasoline shortage may mean that food can’t be transported or distributed in some areas, thus generating new shortages and new price spikes.
When I traveled to Caracas a few weeks ago, the service stations on the road were either closed or had long queues, so we couldn’t buy gas. The trip is not that long—it’s only about 130 miles, and the car has a range of about 350 miles—but accidents on the highway can cause congestion for hours, so we try to insure against that by filling up the night before. When we arrived at the capital, where supplies are more plentiful, it didn’t take us even five minutes to find a station and fill up the tank. Knowing that there would likely be no gas on our way home, we made sure to leave the city with a full tank as well. But by year-end, even those in Caracas had begun posting photos of long gas lines on social networks.
A lot of people stayed home over the holidays in an effort to conserve gas. Vacations and outings were canceled over this issue all over the country. “I tried as much as possible not to go out so as not to waste gas,” said Litai Vasquez, whom I spoke with at a gas station while she was waiting to fill the tank. She and her husband had been planning a holiday trip to Merida, but stayed home to avoid the hassle.
Orlando Lopez is a taxi driver; I asked him about the difficulties of his profession now, with the high costs of auto parts and the gas shortage. He needs to keep the tank full, he told me, in the current situation; cab drivers are obliged to stop working and buy gas when the opportunity arises, or risk losing longer, better-paid fares. “You have to get up at around 5:00 in the morning to buy gas within 40 minutes; if you go after 9:00 or 10:00, it takes two hours or more.”
I spoke to some gas station workers who did not want to be identified, who told me that supplies have been cut in half without warning or explanations from the state-run PDVSA distributors.
Until a couple of months ago, five of the country’s six refineries were paralyzed. Iván Freites, general secretary of the Oil Workers’ Union, reported that the Paraguaná Refinery Complex, which had been working at 10% of its capacity, was taken offline in early November, and is expected to remain out of service until approximately February. Among other causes, the refineries require investments in infrastructure that have not been made in years.
Conditions in the Venezuelan border states are worse than elsewhere in the country; people here sometimes spend days waiting in their cars for fuel. The main culprit is the black market in gasoline, which can be resold at international prices in neighboring countries like Colombia. According to data from Ecoanalítica, gasoline contraband in Venezuela generated more than $2 billion in 2018.
Litai Vasquez told me, “I think gasoline should have a slightly fairer price, but it is also a difficult issue because life in Venezuela is very expensive and this is the only benefit we Venezuelans have [from the government].”
Sanctions imposed by the United States on Nicolás Maduro’s government contribute to the shortage. The United States sold fuel and other products to Venezuela for processing, to help cover the domestic demand. The Maduro government blames U.S. sanctions for the shortage, but the problems in the oil industry are complex, and began much earlier—as early as 1929, when the first case of “Dutch disease,” an imbalance caused by excessive reliance on one sector, hit Venezuela’s economy for the first time.
Thirty years ago, the late Carlos Andrés Pérez, then President, tried to increase the price of gasoline, but his proposed measures led to riots and a second attempted coup d’état in 1992 (perpetrated, incidentally, by Hugo Chávez and other military personnel, who were imprisoned for years before being pardoned). Since then, the government’s gasoline subsidy has remained a ‘third rail’ in Venezuelan politics.
Despite the crisis, the Maduro government is still sending more than 100,000 barrels of fuel per day to Cuba, according to Iván Freites, general secretary of the Oil Workers Union. The export arrangements are part of an agreement between the two countries that extends from the time of Chávez.
Minimal internal production, the paralysis of plants, commitments to Cuba and other countries, the exchange of crude oil for gasoline at low prices and the lack of investment and foresight—all have combined to result in the collapse of fuel reserves. Although people talk as if gas is free here, the reality is that Venezuelans pay for it with their time, which diminishes the quality of life even more in a country facing a deepening economic and humanitarian crisis.
