Why Petrol Price Is Very Low In Venezuela?

The Top 10 countries that pay the least amount of money for gasoline are shown below. Venezuela is the world’s cheapest place to buy gasoline, with a litre costing only 2 pence (GBP).

This is due to the fact that it is home to some of the world’s largest oil reserves. However, it is also a country with an extremely low income. You’ll also notice that oil-rich Middle Eastern countries have some of the cheapest gasoline prices in the world.

What is the cause of Venezuela’s poverty?

The Venezuelan crisis is a long-running socioeconomic and political catastrophe that began under Hugo Chvez’s presidency and has intensified under Nicols Maduro’s. Hyperinflation, rising famine, disease, crime, and mortality rates have all contributed to significant departure from the country.

According to economists questioned by The New York Times, the current scenario is by far the greatest economic catastrophe in Venezuela’s history, as well as the worst faced by a country in peacetime since the mid-twentieth century. The crisis is frequently compared to the Great Depression in the United States, the Brazilian economic crisis of 19851994, and Zimbabwe’s hyperinflation of 20082009. Other writers have compared aspects of the crisis, such as unemployment and GDP contraction, to those in Bosnia and Herzegovina following the 19921995 Bosnian War, as well as those in Russia, Cuba, and Albania following the fall of the Soviet Union in 1991 and the collapse of the Eastern Bloc in 1989.

Due to mounting shortages in Venezuela, Chvez launched a “economic war” on June 2, 2010. Under the Maduro administration, the crisis worsened, exacerbated by low oil prices in early 2015 and a decline in Venezuela’s oil production due to a lack of maintenance and investment. In the face of declining oil income, the government has failed to curb spending and has responded to the problem by denying its existence and aggressively suppressing opposition. Extrajudicial killings by the Venezuelan government have become common, with the UN reporting 5,287 killings by the Special Action Forces in 2017, and at least another 1,569 killings in the first six months of 2019, with the UN stating that some of the killings were “done as a reprisal for participation in anti-government demonstrations.”

Political corruption, chronic food and medical shortages, business closures, unemployment, declining productivity, authoritarianism, human rights violations, terrible economic mismanagement, and a significant reliance on oil have all exacerbated the issue.

The European Union, the Lima Group, the United States, and other nations have imposed individual penalties on government officials and members of the military and security services in reaction to human rights violations, the erosion of the rule of law, and corruption. The US would eventually broaden its sanctions to include the energy industry. Supporters of Chvez and Maduro believe the problems are the product of a “economic war” on Venezuela, which includes “falling oil prices, international sanctions, and the country’s business elite,” while detractors argue the crisis is the result of “years of economic mismanagement and corruption.” The problem, according to most commentators, is caused by anti-democratic administration, corruption, and economic incompetence. Others blame the crisis on the government’s “socialist,” “populist,” or “hyper-populist” policies, as well as their use to maintain political power. According to national and international analysts and economists, the crisis is the result of populist policies and corrupt practices that began under the Chvez administration’s Bolivarian Revolution and continued under the Maduro administration, rather than a conflict, natural disaster, or sanctions.

On all levels, the crisis has had an impact on the average Venezuelan’s life. By 2017, hunger had reached a tipping point, with nearly 75% of the population losing an average of over 8 kg (over 19 lbs) of weight and more than half of the population lacking the income to meet their basic food demands. According to a UN report released in March 2019, 94 percent of Venezuelans live in poverty, and nearly 20% of Venezuelans (5.4 million) will have left the nation by 2021. According to a UN assessment, 25% of Venezuelans will require humanitarian aid in 2019. Venezuela lead the world in murder rates in 2018, with 81.4 people killed per 100,000, making it the world’s third most dangerous country. Following growing international sanctions during 2019, the Maduro government abandoned policies instituted by Chvez, such as pricing and currency controls, resulting in a brief economic recovery before COVID-19 arrived in Venezuela the following year. As a result of the depreciation of the official bolvar currency, the people began to rely on US dollars for transactions in 2019.

According to the national Living Conditions Survey (ENCOVI), 94.5 percent of the population lived in poverty in 2021, with 76.6 percent living in extreme poverty, the highest proportion ever recorded in the country.

Is Venezuela a petrol-rich country?

As of 2020, Venezuela holds the world’s highest proven oil reserves, estimated at 304 billion barrels (18% of worldwide reserves). The country used to be one of the world’s greatest oil exporters, but since its peak in 2012, the oil industry has seen a considerable downturn.

Venezuela had the tenth-highest crude oil output in the world in 2008, with 2,394,020 barrels per day (380,619 m3/d), and was also the world’s eighth-largest net oil exporter. Venezuela is a member of the Organization of Petroleum Exporting Countries since its inception (OPEC).

Why isn’t Venezuela selling its oil?

Russia is a major oil producer in the world. However, the United States’ cruel conflict in Ukraine has forced it to search elsewhere for energy, like Venezuela, which has the world’s greatest crude oil reserves. There are, however, problems. The United States does not recognize Nicolas Maduro’s president. He is viewed as a despotic tyrant. He’s also one of Russian President Vladimir Putin’s most powerful Latin American pals. The US has also barred American energy corporations from operating in Venezuela due to the Maduro dictatorship.

WILLIAM NEUMAN: For the past eight years, Venezuela has been in the throes of a historic, epic economic collapse.

MARTINEZ: William Neuman is the former head of the New York Times’ Andes bureau. “Things Are Never So Bad That They Can’t Get Worse: Inside The Collapse Of Venezuela,” is his book.

NEUMAN: Its economic output has plummeted by 80%. It’s seen hyperinflation, as well as food, medical, and petroleum shortages, as well as infrastructure breakdown.

MARTINEZ: And this has resulted in the world’s second-largest external displacement crisis, with over 6 million Venezuelans fleeing, according to the United Nations Refugee Agency.

NEUMAN: Correct, second only to Syria, which is engulfed in civil conflict. And in Venezuela, it was only a matter of mismanaging the economy.

MARTINEZ: The Biden administration has made diplomatic overtures to the Maduro administration recently. And I wanted to hear Neuman’s take on it.

So, after the war in Ukraine and the Russian energy embargo, how did you react when the Biden administration appeared to be opening a line of contact with Venezuelan President Nicolas Maduro?

NEUMAN: The point is, over the last few years, Venezuela’s oil industry has been pushed to its knees. As a result, production is at an all-time low. Even though they’re sitting on top of all that oil, they can’t expand production too much at this moment. So there’s no way to get enough oil out of Venezuela to alter the world oil price, which is ultimately what sets the price at the pump in the United States. I believe Biden did it primarily to indicate to American voters that he is doing everything he can to bring in as much oil as possible because he recognizes that the price of fuel continues to rise.

MARTINEZ: But if that keeps happening, William, if the price of oil keeps going up and up and up to the point where Biden might have to make strange bedfellows with Venezuela, I mean, could he possibly leverage the US market in exchange for democratic reforms in Venezuela, or do something to help the Venezuelan people get something good out of this deal?

NEUMAN: Of course. Even near the end of the Trump administration, the US policy was to facilitate negotiations between the Venezuelan opposition and Maduro. When the Biden team traveled to see Maduro, one of the topics they discussed was reopening negotiations. And it’s still being discussed in Venezuela. But, in terms of – what everyone is hoping for is some sort of agreement that will ensure a more fair election. In 2024, there will be a presidential election. The country’s politics are all pointing in that direction. The difficulty with sanctions is that once they’re in place, they’re very easy to remove. It’s quite difficult to get rid of them. So you’ve got this oil embargo. And, despite the fact that it hasn’t delivered the results you expected and has instead worsened the Venezuelan problem for ordinary people, its existence is now justified. It’s really difficult to get rid of it once it’s in place. As a result, Maduro has an incentive to try something. There is an incentive for the United States to participate. What kind of political system can you obtain in Venezuela, is the question.

MARTINEZ: But, William, would it legitimize Nicolas Maduro’s presidency if the United States began doing business with Venezuela and allowed American oil corporations to operate more freely there?

NEUMAN: I don’t believe it gives Maduro legitimacy. I was speaking with Chuo Torrealba, a Caracas-based activist, the other day. For numerous years, he was the leader of a coalition of opposition political groups. And he would – when discussing the penalties, he refers to them as “pain politics.” The sanctions are based on the cynical reasoning that if we make things awful enough, if we squeeze the economy and people, increasing their pain, the people would rise up and rebel against the government. Or the military will conduct a coup to depose Maduro. But that isn’t how it works. People who are hungry do not instigate revolutions. In Venezuela, it hasn’t worked out that way. And Chuo, with whom I was conversing, believes that making politics out of people’s suffering is a mistake.

MARTINEZ: Would it be considered a failure if the US satisfied its oil dependency by opening the door to Venezuela in order to keep Russia at bay?

NEUMAN: That is something I believe we should change. I mean, the question is clearly deserving of consideration. But it’s also worth considering the inverse question: is it a failure to maintain sanctions since the sanctions have contributed to Venezuela’s suffering? So, by keeping the sanctions in place, you’re essentially saying, “We’d rather endure this amount of pain even though it hasn’t yielded the desired consequences.” It’s one thing to discuss inflation, economics, geopolitics, and the like. But it’s vital to remember that there are real people in Venezuela who are suffering as a result of this. And one of the things I try to accomplish in the book is to really focus on people’s tales.

So, there’s this woman who lives in Petare, which is one of Latin America’s largest slums. Hilda is her name (ph). She is the mother of seven children. Because Gregorio (ph), her youngest son, was not getting enough calcium, his teeth were becoming black and falling out. Marlan is a woman who engaged in the looting since she had no food at home amid the major blackouts. And then she added, “You know, how did I get to this point where I had to steal food?” And how did my country end up here? People like him, and their stories, are what really bring this stuff home.

MARTINEZ: William Neuman is his name. “Things Are Never So Bad That They Can’t Get Worse: Inside The Collapse Of Venezuela,” is the title of his new book. Thank you, William.

Is Venezuela more impoverished than India?

In 2017, India had a GDP per capita of $7,200, whereas Venezuela had a GDP per capita of $12,500. As of 2011, 21.9 percent of Indians were living in poverty. Venezuela, on the other hand, has a 19.7% unemployment rate as of 2015.

Was Venezuela a wealthy nation?

Venezuela had one of the lowest economies in Latin America at the turn of the twentieth century, but by 1970 it had risen to become the richest country in the area and one of the world’s top twenty, surpassing Greece, Israel, and Spain.

Who owns Venezuela’s oil?

) (English: Venezuelan Petroleum) is the country’s state-owned oil and gas business. Its activities include oil exploration, production, processing, and export, as well as natural gas exploration and production. PDVSA has dominated the oil business of Venezuela, the world’s fifth largest oil exporter, since its inception on January 1, 1976, when the Venezuelan oil industry was nationalized.

Is India a Venezuelan oil importer?

Iran and Venezuela, India’s third and fourth major oil exporters, accounted for 21.8 percent of the country’s total oil imports in 2016. Both India and both countries had good relations, and the oil ministers of all three countries visited each other frequently in Tehran, Caracas, and New Delhi.

Is Venezuela a developing nation?

Venezuela’s economy is mostly built on petroleum, and it has been in a state of severe economic collapse since 2013.

Venezuela is OPEC’s eighth largest member and the world’s 26th largest oil producer (List of countries by oil production). Venezuela has been a rentier state since the 1920s, with oil as its principal export. Since 2015, the country has been experiencing hyperinflation.

Total trade accounted for 48.1 percent of the country’s GDP in 2014. Exports amounted for 16.7% of GDP, with petroleum products accounting for over 95% of all exports. The Venezuelan economy grew steadily from the 1950s to the early 1980s, attracting many immigrants and resulting in the country having the greatest level of living in Latin America. The economy collapsed during the 1980s oil price collapse, the currency began a gradual depreciation, and inflation accelerated, reaching heights of 84 percent in 1989 and 99 percent in 1996, three years before Hugo Chvez took power.

Steel, aluminum, and cement are among the heavy industry products that Venezuela produces and exports. Production is focused around Ciudad Guayana, near the Guri Dam, which is one of the world’s largest dams and provides almost three-quarters of Venezuela’s energy. Electronics and automobiles, as well as beverages and consumables, are examples of notable manufacturing. Agriculture accounts for about 4.7 percent of Venezuela’s GDP, 7.3 percent of the labor force, and at least one-fourth of the country’s land area. Rice, corn, fish, tropical fruit, coffee, pig, and beef are all exported from Venezuela. Venezuela’s natural resources are valued at USD$14.3 trillion, yet it lacks self-sufficiency in major agricultural fields.

Despite their difficult relations, the United States has long been Venezuela’s most important trading partner. Machinery, agricultural products, medical instruments, and automobiles have all been sent from the United States to Venezuela. Venezuela is one of the top four international oil suppliers to the United States. In Venezuela, about 500 American enterprises are represented. According to the Central Bank of Venezuela, the government received roughly US$325 billion from oil production and exports in general between 1998 and 2008. According to the International Energy Agency, the United States received 500,000 barrels per day from a production of 2.4 million barrels per day (as of August 2015).

There has been a decline in oil production and exports, as well as a series of stern currency devaluations, since the Bolivarian Revolution half-dismantled its PDVSA oil giant corporation in 2002 by firing most of its 20,000-strong dissident professional human capital and imposed stringent currency controls in 2003 in an attempt to prevent capital flight. Furthermore, price controls, expropriation of numerous farmlands and industries, as well as other questionable government policies such as a near-total freeze on any access to foreign currency at reasonable “official” exchange rates, have resulted in severe shortages and steep price increases of all common goods in Venezuela, including food, water, household products, spare parts, tools, and medical supplies, forcing many manufacturers to either cut production or close dow. Venezuela recorded over 100% inflation in 2015, the highest in the world at the time and the greatest in the country’s history. According to credible sources, the rate reached 80,000 percent at the end of 2018, with Venezuela sliding into hyperinflation and about 90% of the population living in poverty. Venezuela was declared in default on its debt payments by credit rating agencies on November 14, 2017, with Standard & Poor’s classifying Venezuela as being in “selective default.”

Who buys the most Venezuelan oil?

Venezuela has enormous oil reserves and was producing about 3 million barrels per day until sanctions were imposed and domestic corruption degraded production. However, according to Jorge Pinon, an energy researcher at the University of Texas at Austin, the equipment and gear required to generate vast amounts of oil has rusted away in recent years.

Venezuela presently produces up to 688,000 barrels per day, according to OPEC figures. According to Pinon, the majority of this oil flows to China, with a tiny quantity going to Russia and a small amount going to Iran to pay off debts. Approximately 60,000 barrels are shipped to Cuba and cash consumers such as India.

The current state of production is a long cry from what it once was. As a result, Venezuelan oil supplies are a fraction of what Russia exports to the United States and the rest of the globe.

“I’m not sure why the US delegation went to Venezuela,” Pinon added, “since the country doesn’t have the potential to raise production.”

Is Venezuela’s oil supply greater than Saudi Arabia’s?

Venezuela possesses the world’s greatest oil reserves, with more than 300 billion barrels in storage. Saudi Arabia holds the world’s second-largest oil reserves, with 297.5 billion barrels. Despite its vast natural resource reserves, Venezuela continues to struggle economically. Although Venezuela and Saudi Arabia have similar populations, Saudi Arabia’s economy is twice as huge. The accessibility of each country’s oil reserves is one of the key causes for this discrepancy.

Despite having the world’s largest oil reserves, the majority of Venezuela’s oil is offshore or deep underground, and is considered thick. As a result, extracting the oil in Venezuela’s reserves using present technology is too expensive to be profitable. Saudi Arabia’s oil reserves, on the other hand, are on land and close to the surface, making the oil far more accessible and the extraction process much more cost-effective. As a result, Saudi Arabia’s oil sector becomes much more profitable.