- Title: VENEZUELA: Smuggling of cheap fuel rife along Venezuelan border
- Date: 29th May 2008
- Summary: VARIOUS OF ATTENDANTS FILLING TANKS WITH GAS (SOUNDBITE) (Spanish) VENEZUELAN, VICTORIA JIMENEZ, SAYING: "There were lines 20 years ago but now there are a lot more cars, that's why there are lines. But the contraband affects the lines as well." VARIOUS OF BUSES LINING UP
- Embargoed: 13th June 2008 13:00
- Keywords:
- Topics: Domestic Politics,Energy
- Reuters ID: LVA4HPT0E09SEHCPO5GSPRCKZ2QP
- Story Text: Venezuela's cheap gasoline has spurred a smuggling industry the OPEC nation says costs them 27,000 barrels per day and $1 billion per year.
In the Venezuelan border town of San Antonio del Tachira, petty smugglers stream across the international bridge trafficking fuel they can get at $0.12 a gallon at a Venezuelan pump and sell at $1.50 on the other side.
Police monitor lines of cars that sometimes stretch for blocks, asking for identification and writing numbers on windshields to prevent people from filling up more than once in a day.
Many people try to skirt authorities by changing license plates, going to different service stations or outfitting vehicles with two large gas tanks.
Local Venezuelan resident Victoria Jimenez said trafficking contributes to the long lines of cars.
"There were lines 20 years ago but now there are a lot more cars, that's why there are lines. But the contraband affects the lines as well," she said.
Awash in revenues from record high prices, oil-producing Venezuela sells citizens subsidized fuel -- the cheapest in the world.
Traffickers ranging from small-time peddlers to large-scale smuggling involving corrupt border officials and fuel distributors work daily to sell this gasoline at high markups.
The business is even rife along Venezuela's coast where smugglers load gasoline onto small launches or even commercial fishing vessels to sell it on the high seas.
The government of leftist President Hugo Chavez has promised to clamp down on the business by limiting sales along the border and stepping up oversight by community organizations, but Chavez has ruled out a price hike.
And oil analyst Alberto Quiros said this is the only way to put the breaks on smuggling.
"There is a real problem that isn't going to be solved no matter what is done. The incentive is too high and will be until Venezuela does something about the price of gasoline," he said.
In the meantime, the smuggling continues. Only meters across the border from San Antonio in the Colombian city of Cucuta, where it is not uncommon to see drivers siphoning gasoline out of cars in plain view or peddlers pushing bicycles stacked high with smuggled fuel.
Gasoline bootleggers sit along the road next to 20-liter (5.3-gallon) plastic containers and gallon jugs of Venezuelan fuel which local gas merchant Jhon Jairo Garcia said are filled with gasoline from Venezuela's state-run oil company PDVSA.
"Right now gas is bought at 14,000 pesos ($7.87) and sold at 16,000 pesos ($9) for the large cans. This is 100 percent PDVSA," he said.
Authorities suspect heavy involvement of Colombia's leftist guerrillas and right-wing paramilitary gangs who use cut-rate fuel in the making of coca paste, the base for cocaine.
Venezuela's government has promised not to touch the low prices, considered a birthright in the oil exporter.
In Tachira, the government recently raised prices at a limited group of some stations to $2.82 per gallon, but this mostly targets Colombians buying gasoline in Venezuela.
Authorities have focused instead on restricting vehicle imports. They have required some new cars to convert to natural gas and created community-run registries to fish out traffickers. - Copyright Holder: REUTERS
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