Venezuelan state-owned PdV is partially replacing US gasoline, gasoline components and naphtha now effectively blocked by sanctions with sporadic deliveries from Indian, Spanish, Chinese and Russian companies, PdV and oil ministry officials tell Argus.
PdV's efforts to secure alternative supplies have been facilitated by some of its joint venture partners and clients including Spain's Repsol, Russia's Rosneft and India's Reliance. But the company has been forced to pay premiums in excess of $0.50/bl, with suppliers demanding full pre-payment before offloading the fuel at Venezuelan terminals.
Because PdV's refineries are barely operating and there is little cash to pay suppliers, products were already in short supply before the US ban took effect. In terms of motor fuel, some of the pressure has been mitigated by a shrinking fleet of cars and buses on Venezuela's roads. Either the vehicles no longer run because of a lack of spare parts such as batteries or tires, or drivers have nowhere to go in the collapsed economy.
"Fewer operational vehicles have reduced gasoline consumption to about 120,000 b/d currently from over 250,000 b/d in 2014," a PdV marketing official said.
PdV has adapted to the loss of naphtha, which the company and its partners normally use for blending with Venezuela's extra-heavy Orinoco crude, by shifting toward more blending with domestic light crude instead.
Sporadic products deliveries are arriving from Europe and Asia at the Punta Cardón and Amuay terminals at the 940,000 b/d CRP complex in Falcón state, and at the Jose terminal in Anzoátegui state, CRP and Jose union officials said.
The CRP, which includes the 635,000 b/d Amuay refinery and nearby 305,000 b/d Cardón refinery, currently is able to produce up to 70,000 b/d of finished gasoline by blending imported gasoline components with about 40,000 b/d of unfinished gasoline produced at Amuay, a ministry official said.
A senior oil union official at the CRP said that Amuay and Cardón currently are PdV's "only partially operating refineries." The 140,000 b/d El Palito refinery is off line, and the 190,000 b/d Puerto La Cruz refinery is at risk of shutting down too because PdV does not have the funds or skilled workers needed to maintain it.
PdV transports gasoline imports by sea on its own tankers from the CRP and Jose terminals to the El Palito refinery terminal in Carabobo state, from where it is distributed by tanker truck to the interior of the country. But PdV's cabotage logistics are increasingly strained as the company is forced to use more of its tankers to store over unsold crude. With land storage replete, an estimated 11mn bl is already backed up on tankers at Venezuelan ports.
The US sanctions cut off the US market for Venezuelan crude, leaving PdV scrambling to place more of its barrels in India, China and other markets.
PdV is also seeking barter deals to swap gasoline and diesel imports for Venezuelan crude. The marketing division's efforts have been hampered by a lack of familiarity and experience with the new markets.
The company maintains that domestic fuel supply is normal. But company officials say privately that PdV has halved its fuel distribution volumes since late January. The acute fuel shortage is felt less in Caracas. Outside the capital most service stations exhaust their official weekly fuel stocks within four or five days.
To accommodate vacationers during the Carnival holiday season that kicked off today, Maduro yesterday ordered PdV to redirect supply to service stations on interstate highways and other major roadways.
Maduro launched a national transportation "mission" in early February aimed at revitalizing transport by funding repairs. The initiative has already stalled because the government lacks the hard currency to revive a once-thriving automotive parts sector.
