Tuesday, October 30, 2007

That gasoline crisis of Venezuela

Simon Romero of the New York Times regales us today with a very humorous article which perhaps more than any one he has ever written on Venezuela explains the misery of the chavista pseudo-revolution, and its intellectual and moral bankruptcy (1). All is tied to the ridiculous gasoline subsidies that today plague Venezuelan economy. In all fairness it is not Chavez fault since he inherited from a situation created long ago and which had violent forebodings such as the 1989 Caracas riots and ransacking. However what is absolutely damming for Chavez is that if there was a politician who could have done something about that it was him, but did nothing. In fact, today the situation has reached extremes of ridicule for which he is only to blame.

Mr. Romero who is becoming a keen observer of the glorious bolibanana revolution contradictions reveals us some of the following pearls [with my comments]:

Nicolás Taurisano, 34, a businessman who dabbles in real estate and machinery imports. He is the proud owner of a Hummer ..... also owns a BMW, a Mercedes-Benz, a Ferrari and a Porsche. Now, how come that at 34 you can own such expensive imported cars for your own use under a popular socialist revolution?

Mr. Taurisano pays the equivalent of $1.50 to fill his Hummer’s tank. Thanks to a decades-old subsidy that has proven devilishly complex to undo, gasoline in Venezuela costs about 7 cents a gallon compared with an average $2.86 a gallon in the United States. No comments needed except to point out that at 7 cents a gallon the price does not cover production costs. Period.

Economists estimate that it costs the government of President Hugo Chávez more than $9 billion a year..... draining huge amounts of money .... that could be used for his social welfare programs .... Fuel smuggling into neighboring Colombia, where prices are much higher, is also rife. Domestic fuel consumption is up 56 percent in the past five years, to 780,000 barrels a day, said Ramón Espinasa, .... One-third of oil production now goes to meet the subsidy, he said. Petróleos de Venezuela has disputed such estimates but recently stopped providing public figures on domestic fuel sales. A spokesman at the company said officials were not available to comment on the matter. This is all that is needed to know: a scandalous subsidy, a state oil company that has stopped accounting for its actions, its balances, its production levels, its income, etc, etc ... a large web of lies being set up while the perversion reaches every corner of the economy, making any price meaningless since it is not bound to real production costs where the real price of energy says it all. Imagine how competitive woudl be Venezuelan companies if suddenly they were to pay energy at cost. Just at cost, nothing more.......

So this is it. Even if it is only 1/4 of the oil production that goes to the inner market, the subsidies benefit mostly the rich, those who can afford gas guzzlers, those who an afford AC in every room of their houses, those who can afford freezers to store frozen milk when they are lucky enough to find it. Meanwhile the masses that support Chavez must commute in a hellish traffic, without air conditioning in their rickety "busetas". There is no other symbol as telling of what a fake social revolution Chavez is heading, a revolution which has transformed Caracas, Valencia and many other cities into gigantic parking lots, while at the street corners scores of beggars and displaced Native Americans trying to have cars lower their windows to give them some cash.

Meanwhile tonight the National Assembly placed a provision to suspend the current law of state of emergency automatically as soon as the new constitution is voted. They know what is coming our way and they are preparing the repression diligently. They do not care about scandalous gas subsidies or lack of milk, they only care about remaining in office until they grow old and they are getting ready to kill if necessary when adjustments will have to be made.

1) If article not available anymore, you can find it here.

-The end-

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