Maduro announces curbs to cheap gas in Venezuela

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Handout picture released by the Venezuelan presidency showing Venezuelan President Nicolas Maduro speaking during the broadcasting of a television programme, at the Miraflores presidential palace in Caracas on August 7, 2018. / AFP PHOTO / Venezuelan Presidency / HO /

President Nicolas Maduro announced that from now on Venezuela’s dirt-cheap fuel will be available only to people with a special government aid card that the opposition has denounced as a tool for controlling people.

The government of the economically-ravaged country has for many years heavily subsidized petrol and Maduro says this has now led to a voracious black market in oil smuggled to neighbouring countries.

People who want to keep benefiting from subsidized gas prices in this oil-rich nation must register their vehicles by Friday using the so-called “carnet de la patria,” or fatherland card, which provides access to government assistance.

“Anyone who does not respond to the call for this census, who does not wish to participate in the direct subsidy, will have to pay for gasoline at the international rate,” Maduro said Monday without specifying when this rate would kick in.

Gasoline is practically given away in Venezuela with the subsidy, meaning a single liter of gasoline costs a bolivar, which is next to nothing.

A dollar exchanged on the black market would buy nearly five million liters.

But at the international rate it is out of reach of most Venezuelans.

With runaway inflation, their monthly wage is about a dollar, which hardly buys a kilo of chicken.

Maduro said that the low cost of gasoline has spurred trafficking into Colombia, estimating that this amounts to a net loss for the country of $18 billion (15.8 billion euros) per year.

He said the new subsidy policy will work with the fatherland card system, which the Venezuelan opposition has denounced as a tool of political and social control.

The change comes as new currency notes with five fewer zeroes come into circulation on Monday.

Inflation is forecast by the IMF to hit a million percent this year.

Maduro said the new currency system will reactivate the economy.

Old currency notes and new ones will co-exist for an unspecified period of time.

Maduro said Monday would be a holiday so people can get used to the new notes.