Colombian fuel becomes western Venezuela mainstay

Drivers in western Venezuela depend increasingly on gasoline smuggled in from Colombia, reversing decades of contraband flow in which cheap Venezuelan fuel routinely filled Colombian tanks on the other side of the porous border.

The Venezuelan oil ministry and state-owned PdV estimate that gasoline volumes crossing the border illegally into Venezuela from Colombia's Norte de Santander and La Guajira departments range from 5,000 b/d up to 15,000 b/d, all of it sold by informal vendors in the western Venezuelan states of Tachira and Zulia.

As recently as 2018, border gangs protected by Venezuelan National Guard officials smuggled up to 100,000 b/d of Venezuelan gasoline to Colombia.

Because of US sanctions and PdV's loss of refining capacity, the contraband flow has partially reversed in recent years.

The smuggled Colombian fuel is sold at street level in border cities such as San Antonio and Maracaibo at $2-$3/liter.

The Colombian supply stays mostly in western Venezuela, leaving the rest of country with almost no fuel in recent weeks.

"As yet there is no indication that Colombian gasoline is being consumed anywhere in Venezuela outside Tachira and Zulia," a PdV internal marketing official in Caracas tells Argus.

Because of its informal provenance and handling, the Colombian gasoline tends to contain impurities. "Even dirty Colombian gasoline that does not meet Venezuelan octane ratings is better than no gasoline at all," a retailer in San Antonio said.

The PdV official said "some gasoline also is being smuggled from Brazil into Venezuela's Bolivar state where it is sold on the black market to gold miners, but volumes are difficult to estimate because the gold mines are in isolated areas."

A defense ministry official said the government of President Nicolas Maduro is officially committed to disrupting the smuggling, but unofficially "we look the other way despite periodic seizures because it helps to defuse social tensions."

State-controlled Ecopetrol, Colombia's sole refiner, declined to comment. The company sells to wholesalers that in turn market to distributors and retailers.

Colombia's border areas are subject to government-controlled fuel supply and prices in a system designed to discourage smuggling to Venezuela as well as Ecuador to the south.