A new gasoline crisis hits Venezuela

A new wave of gasoline shortage hits Venezuela. Venezuela, once an energy powerhouse that supplied fuel to almost all of the West, is once again running out of gasoline. The shortages are not felt in Caracas, but are widespread in several federal entities in the interior of the country, particularly in the western towns. Gas stations that are not closed organize users according to the digits on their license plate. This is happening in the Andean towns of Mérida, in Zulia, in the llaneras regions of Barinas, Cojedes, and Portuguesa, in Barquisimeto, in Puerto Ordaz, and Ciudad Bolívar. The agricultural production is facing one of its classic headaches due to this chronic failure. The causes seem circumstantial, but they expose the serious deficiencies of the state-owned Petróleos de Venezuela (PDVSA) in maintaining its refineries and managing its structures with poorly qualified personnel, a situation aggravated by international sanctions. A Greek-flagged tanker from Iran was delayed with the fuel that Venezuela was expecting. Although Venezuela has partially recovered its crude oil and derivatives production, it still cannot supply its domestic market alone. Any delay in the arrival of imported fuel causes serious disruptions. The state has been dealing with this instability, fixing recurring issues, for a few years now. The same goes for electricity. After the production collapse between 2014 and 2019, during Nicolás Maduro's presidency, Venezuela has been struggling since 2021 to recover its oil production. It currently averages a little over 800,000 barrels per day, far from its historical average of close to three million. Recently, supported by the individual licenses provided by the US Treasury Office, the Spanish energy company Repsol announced investments in new oil and gas fields that could increase production by an additional 200,000 barrels by the end of the year. Some economists believe it is possible for the country to reach one million barrels per day by the end of 2024. In addition to Repsol, the American Chevron, the French Murel & Prom, and the Italian Eni, along with 20 other companies and contractors, maintain investments and projects in the country. Most of them are medium-sized companies dedicated to well maintenance and collecting overdue payments. The local production has shown some improvements thanks to PDVSA's own efforts, led by Pedro Tellechea. Before the Chavismo era, the company was capable of managing the entire production chain: exploration, production, refining, and exportation of the national crude oil and its derivatives. Rafael Quirós, an economist focused on the industry and a professor at the Central University of Venezuela, explains: "Most international oil companies in the country want to stay, although they all know that they won't go very far or be able to do much while Nicolás Maduro remains in power." He adds: "They stay hoping that things will change someday, that they can invest on different terms. In the meantime, they will make maintenance investments." Neighboring Guyana is currently attracting multimillion-dollar investments from multinational oil companies that the Venezuelan revolutionary leadership has been inviting to invest for years. However, at the same time, it is driving them away with hostile procedures against private capital. Several factors contribute to the production crisis: the over-politicization of its objectives, the bloating of its workforce, rampant corruption, and the incorporation of businesses other than oil. In addition to the current difficulties imposed by international sanctions, there is a fundamental problem in the lack of maintenance. The backlog accumulated during the past decade. The refinery park, one of the largest in the world, has been plagued by breakdowns despite the government's enormous efforts to partially rebuild it with Iran's help. It is common for them to be repaired, announced to reopen, start working, and then suffer a new breakdown. Accidents, fires, and spills causing ecological damage have been common in this decade. One of the most famous was the explosion at the Amuay refinery in 2010, which triggered a huge scandal and caused numerous deaths and extensive damage in nearby towns. A legislative commission, led by the then opposition deputy María Corina Machado, was determined to go to Amuay, six hours from Caracas, to investigate the causes of the accident, accusing the government of negligence and lack of maintenance. It was Diosdado Cabello, then president of the Legislative Power, who refused to allow the investigation to take place, clinging to the sabotage theory. Something he managed to approve with the parliamentary majority at the time. Cabello himself recently commented briefly on the serious problem of public services, something he has occasionally done at some rallies. "We are not closing our eyes, we have flaws. We are addressing them. What people need to think about is that we would be much worse off if the right-wing, the surnames, were in power. The first thing they would do is privatize everything."