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Venezuela’s gasoline goes from world’s cheapest to steepest

Maria Ramirez, Mariela Nava - Reuters — Mon, 27 Apr 2020 13:02:55 +0000

PUERTO ORDAZ/MARACAIBO, Venezuela (Reuters) – Venezuelans reported paying above $2 per liter ($7.57 per gallon) for gasoline last week amid fuel shortages, one of the world’s highest rates and a dramatic reversal for an OPEC nation that long boasted of having the world’s cheapest fuel.

Thanks to subsidies under socialist former President Hugo Chavez and his successor and protege, Nicolas Maduro, gasoline sold by state oil company PDVSA – which has a legal monopoly on fuel sales – is essentially free in Venezuela.

Motorists offer pump workers tips of snacks or a few hundred bolivares – under 10 U.S. cents – instead of payment.

But the country’s 1.3 million barrel-per-day refining network has all but collapsed, and U.S. sanctions aimed at ousting Maduro have complicated fuel imports, prompting Venezuelans to either wait hours outside gas stations or turn to the pricey black market.

Octavio Salom, 53, said he and fellow kidney patients in the eastern city of Puerto Ordaz bought 20 liters of gasoline at $2 per liter for the nurses that provide their dialysis treatment to take a taxi to the clinic.

“They told us that if we could not secure transport, they could not give us dialysis,” Salom said.

In the western city of Maracaibo, black market dealers are offering to deliver 20 liters of gasoline for $50, according to a Reuters witness. In some areas, Venezuelans have reported paying up to $4 per liter.

That was above pump prices in Hong Kong, which surveys show has the world’s most expensive gasoline. Unleaded gasoline at Royal Dutch Shell (RDSa.L) stations in the city sold for $2.15 per liter as of Thursday, the company’s website here showed.

“Now we need to do sketchy deals to be able to get what is ours, gasoline,” said Maria Ines Urdaneta, a university professor in Maracaibo who always keeps a full tank in case her asthmatic son has an attack.

“As a single mother, I need to go negotiate with some guy who bleeds my wallet dry of dollars just to get gasoline.”

Venezuela’s spike comes as pump prices elsewhere are plunging due to falling demand amid the coronavirus outbreak. In the United States, prices averaged $0.48 per liter ($1.81 per gallon) in the week ended April 20, according to the Energy Information Administration.

PDVSA did not respond to a request for comment.

Venezuela’s government is seeking to repair refineries, and this week received refining material from Iran.

Reporting by Maria Ramirez in Puerto Ordaz and Mariela Nava in Maracaibo; Writing by Luc Cohen; Editing by Steve Orlofsky

Our Standards: The Thomson Reuters Trust Principles.

Source: https://www.reuters.com/article/us-venezuela-gasoline/venezuelas-gasoline-goes-from-worlds-cheapest-to-steepest-idUSKCN2280H1?rpc=401&

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Oil falls on news of Saudi-Russian deal to raise output

Henning Gloystein — Wed, 03 Oct 2018 05:20:00 +0000

The biggest increase in US stocks in about 19 months also put pressure on crude prices.

Saudi Aramco’s Ras Tanura oil refinery and oil terminal. Picture: REUTERS
Singapore — Oil prices fell on Thursday from the four-year highs reached the previous session, pressured by rising US inventories and after sources said Russia and Saudi Arabia had struck a private deal in September to raise crude output.

Brent crude oil futures were trading at $85.85 a barrel at 1.04am GMT, down 44c or 0.5% from their last close.

Brent hit a four-year high of $86.74 a barrel on Wednesday.

US West Texas Intermediate (WTI) crude futures were down 30c 0.4% at $76.11 a barrel.

“Data for last week showed a much more significant than expected … build in US commercial crude (inventories), which generally suggests that oil prices should tumble,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.

US crude oil stocks rose by nearly 8-million barrels last week to about 404-million barrels, the biggest increase since March 2017, Energy Information Administration data showed on Wednesday.

US weekly Midwest refinery utilisation rates dropped to 78.9%, their lowest since October 2015, according to the data.

Meanwhile, US crude oil production remained at a record-high of 11.1-million barrels a day.

“This on top of the other big news of the day from Riyadh that … Saudi Arabia and Russia will boost output,” Innes said.

Reuters reported on Wednesday that Russia and Saudi Arabia struck a private deal in September to raise oil output to cool rising prices, before consulting with other producers, including the rest of the Organisation of the Petroleum Exporting Countries (Opec).

Russia’s and Saudi Arabia’s actions come as markets have heated up ahead of US sanctions against Iran’s oil sector, which are set to kick in from November 4, and which many analysts expect to knock about 1.5-million barrels a day out of global supply.

On the demand side, there is increasing concern that high oil prices and weakening emerging market currencies are creating a toxic inflationary mix that could erode fuel demand and economic growth.

“We have been taking a very close look at the demand signals in the market, and what we have been seeing is not good,” JBC Energy said on Wednesday in a note to clients.

The energy consultancy said it had lowered its oil demand forecast amid Brent prices above $80 and diving currencies in many emerging markets, as well as burgeoning product stocks and the ongoing China-US trade dispute.

“We are not talking about cosmetic changes either. We have cut our forecast for 2018 demand growth by a whopping 300,000 barrels a day to below 1.1-million barrels a day,” it said.

Reuters

Source: https://www.businesslive.co.za/bd/markets/2018-10-04-oil-falls-on-news-of-saudi-russian-deal-to-raise-output/

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