In a week when oil futures fell below zero, everyday Venezuelans are paying more than ever for gasoline as extreme shortages fuel a booming black market. The crisis has now spread to the capital city of Caracas, where priority drivers including doctors and police start lining up at 3 a.m. for a chance to buy heavily subsidized gas at one of the handfuls of service stations still open. On a good day, they’ll be able to score 20 liters (about 5 gallons) after a 10-hour wait, not even enough to fill half a tank on most compact cars. Often there’s not enough to go around, with reports surfacing of ambulances being sidelined by the shortages.
Everyone else is turning to a black market that, in some cases, is run by the same military men charged with safeguarding precious stocks for essential workers. In a working-class neighborhood in San Cristobal, near the Colombian border, one resident described scenes of National Guard members arriving in SUVs to deliver gas cans for about $2.50 per liter (almost $10 per gallon). That’s up from about $1.50 a liter a few weeks ago and essentially nothing at all for years before that.
“If you have enough money or if you have friends in the military or the government, you won’t have any problem getting gas,” said Domingo Rosales, a 40-year-old coffee-shop owner in San Cristobal. “If not, you have to suffer”
The surge in prices stands out as oil futures globally collapse because of lockdowns that have sapped all demand, leaving countries from the U.S. to Russia flush in unwanted oil. New York crude futures for May delivery plunged below zero for the first time ever on April 20.
Mismanagement and Corruption
For the past seven years, Venezuela has been on a long slide toward collapse, with residents facing no shortage of indignities in their daily lives, from grave robberies to being prescribed medicines made for pets. Even so, running out of gasoline in the oil-rich nation is a painful blow — both financially and psychologically. A decade ago, oil was the firepower behind then-President Hugo Chavez’s ambitions to transform his nation into the socialist counterbalance to American capitalism. Venezuela owns the world’s largest crude reserves.
Shortages are due to a combination of factors, including mismanagement and corruption at state oil company PDVSA. But the real blow came with U.S. sanctions starting in 2019 that prevent Venezuala from exporting its crude or importing refined fuel products.
As shortages grew worse, the government handed control of gas stations to the military last month. At the pumps, the official subsidized price is still so close to zero that attendants will often just give it away in exchange for cookies instead of cash.
That creates the opportunity to profit by selling in the black market for huge markups. Daniel Guerra, a 31-year-old taxi driver, was driving around a remote Caracas area when he spotted a group of teenagers selling gasoline on the street. “They had a plastic container,” he said. “Without thinking twice, I paid them $10 for it.”