Government of Venezuela formalizes increase in the price of diesel

The Venezuelan Ministry of Petroleum made official the increase in the price of diesel for the industrial sector to 0.32 dollars per liter, cutting the subsidy that it had maintained since 2020 and which made it practically free.

“The price of diesel fuel for the industrial sector is adjusted at a rate of (USD 0.32/Lt). This price may be paid in bolivars at the exchange rate set by the Central Bank of Venezuela on the day that corresponds to the supply,” the statement stated. official Gazette of July 3 released this week.

The resolution signed by the Minister of Petroleum and president of the state-owned Petróleos de Venezuela (PDVSA), Pedro Tellechea, specifies that the establishment of prices will be evaluated, “as required by the sectors considered priority.”

Last week, a document signed by Juan Carlos Díaz Socorro, PDVSA’s Vice President of Commerce and National Supply, circulated, in which direct customers and fuel distributors were informed that as of July 6 the price adjustment of the diesel for the industrial sector destined for the local market, with the exception of the health sector “for which the subsidy is maintained”.

Historically, Venezuela was characterized by enjoying one of the cheapest fuels in the world. In June 2020 the government ​set a fuel distribution schemea subsidized one (only 120 liters per month per person and meeting certain requirements) and the one currently paid by the majority of the population, 0.50 cents per liter.

But there are fewer and fewer service stations that sell gasoline at a subsidized price and that have been changing to an “international” price by decision of PDVSA.

The same situation has occurred with diesel; In 2022, the government eliminated the 100% diesel subsidy for heavy cargo transportation and set it at $0.50 per liter.

In recent years, trade unionists from the deteriorated oil industry and other experts in the field have agreed that, as a result of years of corruption, the lack of investment, maintenance and qualified personnel, the refineries in Venezuela, all state-owned, have been left in a state of disrepair. of “operational collapse” that limits the possibility of producing the necessary fuel to supply the internal market.

The situation became even more critical after the administration of former President Donald Trump banned foreign companies from exchanging diesel for Venezuelan oil.

The Venezuelan government attributes the spikes in fuel shortages to the sanctions imposed by the international community.

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