Venezuela prepares fuel distribution overhaul as fourth Iranian tanker nears

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MARACAY, Venezuela/CARACAS – Venezuelan officials pledged to revamp the country’s gasoline distribution system as the fourth cargo of a five-tanker flotilla bringing fuel from Iran approached the South American nation’s exclusive economic zone on Wednesday.

Iran is providing the country with up to 1.53 million barrels of gasoline and components to help it ease an acute scarcity that has forced Venezuelans to wait in hours-long lines at service stations or pay steep prices on the black market.

With the arrival of the gasoline, top officials pledged changes to a distribution system that offers effectively free fuel after over two decades of frozen pump prices. While they did not provide details, service stations have begun testing new payment systems, three people with knowledge of the matter said.

Diosdado Cabello, president of Venezuela’s Constituent National Assembly, a parallel legislative body formed by President Nicolas Maduro’s allies, distributed a message among governors late on Tuesday asking them for support for a new fuel supply system.

“We will increase distribution, but at some point we will have to charge for it,” he said to explain a plan drafted earlier by Maduro to secure and supervise supply to service stations through satellite monitoring.

In recent weeks, more than 100 service stations across the country have received new equipment that would allow them to charge for gasoline and ration retail sales, though their operators have not yet received clear instructions from the government or state-run oil company PDVSA, said the people, who spoke on the condition of anonymity.

On Wednesday, several stations had begun testing the new systems’ internet connection.

Maduro in 2018 had pledged to increase prices at the pump, but never went through with the plan. Ending fuel subsidies is seen as politically risky in Venezuela, where a 1989 effort to raise gasoline and transportation prices contributed to a deadly wave of riots and looting.

“PARIAH STATES”

While applauded by the Venezuelan government, the Iranian supply has been criticized by U.S. authorities as both OPEC-member countries are under sanctions. The vessels have so far navigated undisturbed to their destinations.

The fourth tanker, the Faxon, was passing north of Venezuela’s neighboring dual-island nation of Trinidad and Tobago as of Wednesday afternoon, the Eikon data showed. The third, the Petunia, was approaching the El Palito refinery, while the first two were discharging at ports.

 

David Schenker, the U.S. assistant secretary of state for Near Eastern affairs, said on Wednesday that Washington was “not pleased” with the shipments and was looking at “options” for a response.

“These are two pariah states,” Schenker said during a webinar organized by the Beirut Institute. “One could imagine them sending other things, I mean weapons, who knows.”

 

Reuters

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