Subsidized gasoline price increases 1,900% in Venezuela

The price of subsidized gasoline in Venezuela went from 0.005 bolivars per liter (0.001 dollars) to 0.1 bolivars (0.2 dollars), which represents an increase of 1,900%, the state oil company PDVSA reported this Saturday.

However, it kept the cost of unsubsidized gasoline, the most widely consumed in the country, at $ 0.5 per liter.

The measure was adopted after the monetary reconversion that came into effect on October 1, through which six zeros were eliminated from the Venezuelan currency, then called the sovereign bolivar and which was renamed the digital bolivar, PDVSA detailed in a statement.

“By virtue of the entry into force, on October 1, 2021, of the new monetary expression, that is, the digital bolivar, it is necessary to adapt and consequently update the price in bolivars of the subsidized fuel, which, to As of Sunday, October 24, 2021, it is established in the amount of ten cents ”, reads the information.

According to the statement, that represents “the same 95% direct subsidy.”

This subsidy method was announced on May 30 last year and took effect a day later, after a time of severe gasoline shortages.

The subsidies put in place allowed refueling up to 120 liters per month per vehicle at a price of 5,000 sovereign bolivars (which today means 0.005 digital bolivars) per liter, which at that time were exchanged for 0.02 dollars.

Motorists, a population that increased notably in the country due to the crisis it is experiencing, were only allowed to refuel 60 liters at subsidized prices each month.

In this way, the new cost of subsidized gasoline remains, at the exchange rate, at two cents on the dollar, the same price it had when the policy was introduced.

Venezuela is experiencing a transactional dollarization in the face of the strong devaluation that the bolivar has experienced in recent years, which is why most products in the country are bought and sold in the US currency. (I)