Venezuela tight­ens grip on fuel sta­tions after sub­sidy re­form

Re­moval of li­censes will likely al­low the state to take the ben­e­fit of higher pump prices

Arab News - - Business News - Reuters Cara­cas

Venezue­lan state oil firm PDVSA has told in­de­pen­dent gas sta­tion op­er­a­tors it can re­voke their li­censes “at any time,” only weeks after it cut gen­er­ous fuel sub­si­dies and as wide­spread short­ages take hold, a no­ti­fi­ca­tion PDVSA sent to the op­er­a­tors showed.

PDVSA has a mo­nop­oly over the whole­sale fuel dis­tri­bu­tion mar­ket and owns al­most all of the coun­try’s 1,200 ser­vice sta­tions, although most are op­er­ated by pri­vate com­pa­nies through com­mer­cial li­censes.

Many are suf­fer­ing the ef­fects of years of price freezes that pre­vented fuel sales in­come from keep­ing up with the costs of main­tain­ing their sta­tions.

The in­dus­try had hoped the sub­sidy re­forms and re­sult­ing price rises could re­vive their busi­nesses, but the re­moval of li­censes could al­low the state to take the ben­e­fit of higher pump prices.

The no­ti­fi­ca­tion doc­u­ment says PDVSA “will be able to re­scind the con­tract uni­lat­er­ally and at any time.” A per­son fa­mil­iar with the process, who asked not to be named, said so far 12 gas sta­tions in Cara­cas had re­ceived the no­ti­fi­ca­tion.

The shift is a new sign of the des­per­a­tion of Pres­i­dent Ni­co­las Maduro’s gov­ern­ment for hard cur­rency as the COVID-19 pan­demic and US sanc­tions have re­duced Venezuela’s ca­pac­ity to earn ex­port rev­enue from oil ship­ments.

FASTFACTS

State oil firm PDVSA has a mo­nop­oly over the whole­sale fuel dis­tri­bu­tion mar­ket and owns al­most all of the coun­try’s 1,200 ser­vice sta­tions, although most are op­er­ated by pri­vate com­pa­nies through com­mer­cial li­censes.

•Many

are suf­fer­ing the ef­fects of years of price freezes that pre­vented fuel sales in­come from keep­ing up with the costs of main­tain­ing their sta­tions.

Reuters

Cars are parked in line near a gas sta­tion with sub­si­dized fuel in Cara­cas.

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