In Venezuela, it makes no difference whether your car consumes 6 or 30 litres per 100 kilometres because the state spends billions of dollars in petrol subsidies and nowhere else in the world is fuel as cheap as it is in Venezuela.
A motorcycle taxi driver who spends up to 10 hours a day riding through the traffic chaos of Caracas, a city of over 6 million inhabitants at first does not understand the question of how much he spends to fill up his motorbike's tank with around 10 litres of petrol.
Eventually, however, he digs into his trouser pockets and grins as he shows a small coin. It is 1 bolivar - worth 23 US cents according to the official exchange rate. But most people exchange their money on the black market, and their bolivar is worth less there, meaning 1 litre of 95-octane petrol goes for a laughable 1 US cent.
It does not come any cheaper, anywhere in the world. It is no wonder that, in wealthy neighbourhoods of Caracas such as the elegant Altamira, it is mostly powerful, huge SUVs and luxury cars with engines of up to 4 litres that stop at the petrol stations of state oil giant PdVSA. There are no large price displays like the ones seen elsewhere in the world.
"Petrol prices are a joke," says Henrique, a taxi driver, who drives a comparatively small Ford Fusion with a 6-cylinder engine and 3 litres of engine capacity. In poorer areas such as Barrio Petare 20- and 30-year-old Chevrolets and the equally dated Toyota Landcruiser wind through the alleys as taxis.
The fuel efficiency of automobiles plays no role at all in Venezuelan life. Water actually is a lot more expensive than petrol. At corner stores a litre of water goes for 8 bolivars (1.86 dollars at the official exchange rate). That's enough money to fill up an 80-litre petrol tank. In fact, one can fill up the tank three times even for the price of a pack of cigarettes (30 bolivars, 6.98 dollars).
The left-wing populist government of Venezuelan President Hugo Chavez does not want to tinker with petrol prices; cheap fuel is supposed to be beneficial for the people. However, it comes at a high price, as subsidies cover more than 90 per cent of the real cost of petrol. The consumer only pays for a tiny fraction of what the petrol really costs.
To do this, PdVSA alone is giving up around 1.5 billion dollars per year, according to official data. The total subsidies, moreover, are according to various estimates significantly higher and amount to at least 7 billion dollars per year. Venezuela is one of the world's largest producers of crude oil and a member of the Organisation of Petroleum Exporting Countries (Opec). It has, according to Venezuelan authorities, around 300 billion barrels of oil, which amount to the world's largest reserves.
However, the country paradoxically needs to import petrol, since its refineries do not have enough capacity to satisfy demand in the domestic market. This situation got even worse due to the explosion and subsequent fire that happened a few weeks ago in Amuay, Venezuela's largest refinery, killing more than 40 people.
Although most people understand the effect of the subsidies, hardly anyone would dare imagine even halfway realistic market prices for petrol. Both Chavez and his challenger Henrique Capriles, the candidate of a unified opposition, are aware of the issue in the run-up to the October 7 presidential election.
Chavez and Capriles, like everyone else, remember 1989, when the attempt to make petrol prices more realistic led to violent riots in which hundreds of people were killed. The idea at the time was to increase the price of petrol by 100 per cent and the price of public transportation by 30 per cent.
The Venezuelan government keeps asking people to save fuel so that it in turn would save subsidies. In border states, chips are used with limited success to regulate fuel consumption and hinder smuggling, particularly across the border into Colombia, where petrol fetches many times the Venezuelan price. However, as long as oil billions keep pouring in and the price of crude oil remains above 100 dollars per barrel, no one in Venezuela is seriously thinking about saving petrol.
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