Venezuela fuel gap frays nerves, snarls food dispatch

Tensions are flaring at Venezuelan service stations where motor fuel is running out.

One driver waiting in line to tank up at a station in Merida state was shot dead and two others were injured on 8 June during a clash with police that were supervising restricted fuel sales to hundreds of vehicles, according to civil emergency officials.

State government and civil emergency officials in 12 of Venezuela's 23 states warn of the likelihood of more clashes as Venezuelans scramble to find scarce fuel.

An oil ministry official said expanded US sanctions imposed last week will probably cut state-owned oil company PdV's imports of refined products including finished motor fuel, additives used in gasoline production and naphtha used as diluent in the Orinoco oil belt to under 100,000 b/d in June from about 130,000 b/d in May and up to 190,000 b/d in January-April 2019.

Venezuelan imports of clean products have halved since the US imposed sanctions on PdV on 28 January, according to vessel tracking data.

The anticipated drop in PdV's products imports this month will aggravate the fuel deficit, the ministry official added.

Government security forces are bracing for more violence at fuel pumps. "Drivers in some rural areas waiting for up to three days in kilometric lines at service stations are losing patience and brawling with other drivers and security officials," an official at National Guard headquarters in Caracas tells Argus. "We're trying to maintain public order, but there have been numerous instances of security forces in the interior of the country extorting money from drivers to allow them to jump ahead in lines to buy fuel."

There is no formal fuel rationing in Caracas yet, but many of the city's stations have suspended operations in the past month as gasoline and diesel deliveries have dwindled.

Around 800 of PdV's 1,765 service stations nationally are now closed, up from 500 a month ago, oil union leader Ivan Freites said, citing internal oil ministry figures.

Oil union officials and state government authorities report that stations in up to 18 Venezuelan states are restricting sales of gasoline and diesel to between five and eight gallons per vehicle.

Authorities in the states of Bolivar, Monagas and Portuguesa are also rationing fuel based on license plate numbers in an effort to reduce growing lines of hundreds of vehicles.

In western Venezuela, smugglers are bringing fuel from neighboring Colombia across the porous border and selling it in small containers for US dollars. During flush times, Venezuela's cheap fuel was regularly smuggled into Colombia for resale at much higher prices. Now that Venezuela has run out of fuel, some oil products are flowing in the opposite direction for the few Venezuelan drivers who can afford it.

A major concern of the fuel crisis is fresh food distribution in a country where hunger is widespread. Drivers of trucks used to transport fresh vegetables and meat from the interior of Venezuela to large cities such as Caracas and Maracaibo are allowed to buy only up to 12 gallons apiece, an executive with a Merida-based food transport company tells Argus.

Truck drivers hauling vegetables grown in the Andean region to Caracas, a distance of up to 590mi (950km) over deteriorated roads, warn that the fuel shortage already has disrupted up to 70pc of distribution.

PdV continues to insist that it has ample fuel stocks to supply the local market's needs, and blames any shortages on the combined effects of panic buying and US sanctions.

Oil union officials at PdV's 940,000 b/d CRP refining complex in Falcon state and the 190,000 b/d Puerto La Cruz refinery in Anzoategui state maintain that panic buying is not an issue, but US sanctions against PdV have aggravated a deficit caused by the collapse of the company's refineries.

The CRP refining complex, which includes the 635,000 b/d Amuay refinery and nearby 305,000 b/d Cardon refinery, currently is processing roughly 100,000 b/d of crude and producing about 25,000 b/d of gasoline for a local market where current demand is estimated at about 120,000 b/d. All of the scant CRP operations are focused on Amuay. Cardon is off line.

The 190,000 b/d Puerto La Cruz refinery is "only sporadically" processing up to 30,000 b/d of crude, and the 140,000 b/d El Palito refinery in Carabobo state has not operated at all for over a year, union officials said.