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Global oil prices zoomed up to $135 a barrel this past week. But that doesn't worry Roberto Morales, a 33-year-old Venezuelan businessman. Morales, who drives a compact Volkswagen Gol, still pays only $1.32 to fill up his car with 11 gallons of high-octane gasoline, thanks to Venezuela's subsidized fuel price.
"This is crazy but I'm not complaining," says Morales. "Gasoline here is cheaper than water."
He's not exaggerating. Gasoline prices in Venezuela are the cheapest in the world—1/15 the price of a liter of bottled water, and 1/25 the price of a liter of milk. Since 1998, Venezuela has kept the price of gas fixed at 0.097 strong bolivars a liter, or about U.S. 3¢ (lower octane is 0.070 strong bolivars). That means that consumers pay about 12¢ a gallon, or 1/33 of what their U.S. counterparts pay
But Venezuela is paying a price for cheap gasoline. State oil company Petróleos de Venezuela is footing an $11 billion a year bill for underwriting and subsidizing the fuel. That's nearly double its 2007 net income of $6.27 billion. The cost of that subsidy, along with money it pays to underwrite government social programs, has forced Petróleos de Venezuela to borrow billions on international markets to cover investments.
"As domestic consumption and international prices increase, the price of keeping that subsidy in place is also rising," says Patrick Esteruelas, an analyst with New York-based Eurasia Group, which provides political risk analysis. "But the government is reluctant to raise gasoline prices now, especially at such a politically critical time."
Originally posted by DalairTheGreat
I wonder if Mr Hugo is accepting immigrant to his country.
For 12 cents a gallon I'd buy a boat an start a gas smuggling ring.
Originally posted by ironman433
but one thing you have clearly missed is that when us stupid lazy Americans have been forced into getting around in donkey pulled carts the venezualans will be zooming around in zippy little vw's with the stereo playing loud living like humans .
the days of living like rockstars are OVER people . three generations of lazy ass spoiled rotten brats have led us into the crisis we face now and in the future . years of suffering stand before us and you and your wife are still driving v-8 powered suv's acting like your someone important . maybe you can afford it or maybe not but the cold hard reality is that the people that i just described are a major part of what is turning our way of life into something that will end up resembling a third world country if we don't quit now.
one recession and heading towards a depression in the near future and i'm only 41yrs old . this is america it's not supposed to be this way guys . we are the leaders of the world " well we use to be " and there is no reason that we can't have affordable fuel cost's again if we can only learn our place in this world again and quit being so lazy and take responsibility for the way we consume and not give back in return .
go ahead and pick apart the venezualans gas prices or their methods of getting those prices but if that's what your going to fucus on instead of cutting back on yours then you ALSO are part of the problem .
alternative fuel's are the answer and the complaining about the way other countries do it for themselves is counterproductive and just plain old stupid .....
[edit on 26-5-2008 by ironman433]
[edit on 26-5-2008 by ironman433]