The Venezuelan government has risen the price of subsidized gasoline by nearly 20 times, in light of its fears of inflation.
Venezuela suffers from severe financial difficulties that the government attributes to US sanctions.
State oil company PDVSA said that the rise in subsidized fuel prices “is a necessity” due to the “re-denomination” of the local currency,
The hike comes weeks after Venezuela launched a new currency, the digital bolivar, which slashed six zeros off the former currency on October 1.
This is the second increase in subsidized fuel prices since June 2020, when the government of President Nicolas Maduro reversed a decades-old policy of freezing fuel prices in order to “tVenezuelan governmento guarantee fuel production and distribution in the country,”
Even with rising prices, PDVSA’s subsidized fuel is still among the cheapest in the world.
The increase will raise fuel prices to 2.3 cents per liter or 10 cents per gallon, which is a fraction of the cost of fuel at stations in most countries. The price is currently 0.1 cent a liter or 0.5 cents a gallon.
Venezuela was one of the richest countries in South America thanks to its oil wealth. But its economy has witnessed a sharp deterioration due to US sanctions and low oil prices in recent years, as its gross domestic product has witnessed a decline of 80% since 2013.
According to Agence France-Presse earlier this month, 94.5 percent of families live below the poverty line, according to a recent university study.
According to the study, about five million people have left the country due to the economic and political crisis. The country’s total population is about 28.8 million.
The Venezuelan government has been suffering international sanctions imposed since 2019, especially by Washington, which has been seeking to oust President Nicolas Maduro since he was re-elected for a second term in 2018 in elections whose results were rejected by the opposition.
Venezuela produced 520,000 barrels of oil per day last February, according to the figures of the Organization of Petroleum Exporting Countries (OPEC). The country produced about three million barrels per day in 2013.