Venezuela will receive 27% more income from PDVSA after sanctions relief

The government of Venezuela contemplates a 27% increase in oil revenues that will finance the 2024 budget, according to a document seen by Reuters, amid a stagnation of the crude oil productiona review of US sanctions and in an election year.

The president’s administration Nicolas Maduro estimates that next year’s spending will be equivalent to US$20,504, according to the budget bill that has not yet been released.

The budget, which rises 39% compared to 2023, will be reviewed by the National Assembly controlled by the ruling party in the coming days and possibly approved.

With the relief of oil sanctions until April, something that could change if the United States decides so, analysts have pointed out that the flow of foreign exchange oil companies will increase and thus allow Ripe greater scope to expand public spending ahead of the presidential elections.

According to the budget bill, the revenue that will be allocated PDVSA Their external sales and tax payments will cover 58% of the Government’s total expenditure and will be equivalent to US$ 11,886 million, according to the exchange rate calculated by the Venezuelan issuer. The 2023 contributions were US$9,341 million.

PDVSA’s contributions to the budget do not represent the total resources that the state company could receive in the year, because part of its income is kept in other funds, about which there is little information.

The budget proposal does not mention either the estimate of the price of crude oil or production for 2024, as was usually done until seven years ago.

The United States reviewed sanctions in October after Maduro’s government and the opposition signed an electoral agreement, but Washington has said it is considering reinstating them because the government has not released political prisoners and Americans. “unjustly detained.”

The flow of oil revenues has been hit by low production, which has been impacted by deteriorating infrastructure and years of disinvestment. This year, oil production has averaged 800,000 barrels per day (bpd), according to the OPEC.

The Communications Ministry and PDVSA did not immediately respond to requests for comment.

The document shows that tax revenues for next year will be equivalent to US$5.54 billion, and will finance 27% of spending.

The rest of the budget will be covered with debt: paper placements in the domestic market and loans.

In the bill, the Ministry of Finance said that next year “they will design policies to protect the people against speculation and inflation,” but did not offer details. The document also does not include the inflation or growth goal for the next year.

Since last year, Maduro has tried to stop price growth by restricting public spending, limiting credit and anchoring the exchange rate. But still the inflation is high and the annual rate as of November was 282.7%, according to official data.