Diesel fuel scarcity threatens to unleash another storm in Venezuela

By Gonzalo Dominguez Loeda

Caracas, Mar 23 (efe-epa).- With its citizens impoverished, beaten down and malnourished, Venezuela is now experiencing a new challenge amid its already-dire crisis: the scarcity of diesel fuel.

Diesel is key for the shipment of goods throughout the country. The long lines of truck drivers that have begun to be seen at gasoline stations are a harbinger of a new storm that could produce unpredictable consequences.

The country that formerly was a petroleum-exporting nation and still sits atop one of the world’s largest reserves of oil, has found its fuel supplies drying up during the coronavirus quarantine. Between April and May of 2020, it was almost impossible to find gasoline in Venezuela and the Nicolas Maduro government, which blames the scarcity on US sanctions, had to turn to Iran as a fuel supplier.

However, at that time, gasoline was still available and the overall supply was not at risk, and fuel prices did not rise.

Econometrica director and financial analyst Henkel Garcia said that the big risk in this new situation is that, if the current scarcity of gasoil continues, this will have the “immediate effect” of causing “empty shelves” in virtually all stores around the country.

“We’re already seeing it, above all for fresh cheeses. That distribution chain is already being affected and some vegetables are having problems getting to different cities,” he said.

Garcia warned that “we’re going to see how, little by little, in a progressive way, it’s going to be harder and harder to get certain products,” in some cases, and only “intermittent” supplies of others.

“If this gets more complicated, what we’re going to see is people who are not going to be able to move around because public transport’s not going to be able to function and shelves, literally, will be empty because the products can’t get there,” he said.

Nevertheless, Garcia said that the impact on prices will be minor, something that would not happen in any other country “with a healthy market economy,” but in Venezuela – “with so many years of (economic) control and a socialist spirit” – there won’t be big price hikes “because of the fear of fiscal controls and the company closings.”

He said that public transportation and food supplies will be the things most affected in this potential crisis, given that “the bulk” of Venezuela’s damaged economy revolves “around the basics,” that is to say food.

Meanwhile, Universidad Central de Venezuela economist Ronald Balza said that farmers will also be affected, since after the harvest they will find themselves burdened with products they cannot market.

“Once the (food) product is obtained, there’s very little time in which to transport it … and (the fuel scarcity) could cause losses,” he emphasized, adding that the problem “is not just in food that we don’t eat, but the money that (the farmers) don’t have for the next crop.”

Balza said that Venezuela “is an impoverished country” and that, if things are paralyzed by a fuel shortage, this could further damage the economy, agriculture “and the different exchange options that could arise.”

He also noted that Venezuela has infrastructure problems, in particular the poor state of its roadways, the lack of security for transport workers and producers – namely those who live and work near the border with Colombia and are at risk of being kidnapped by guerrillas – and the condition of the river and coastal ports, among other things.

Thus, he said that a good part of the country will be affected if the situation is prolonged, although Caracas should not feel the pinch to the extent of more isolated areas “because the government has always made decisions that seem to favor the capital.”

But, he said, the capital “doesn’t produce any food” and so a fuel scarcity could be something that “could concern everyone a lot.”

EFE