Page 5 - MEOG Week 22

MEOG Commentary MEOG
US sanctions against Venezuela under Maduro, who has overseen an internal economic collapse. The US this month issued a global maritime advisory note, giving guidance to the shipping industry on how to avoid sanctions related to
Iran, North Korea and Syria.
Washington has appeared willing to rely
on economic measures instead of using its beefed-up naval presence in the Caribbean to block the tankers. Iran and Venezuela have warned against US military force.
Fuel shipped from Iran began arriving at Ven- ezuela’s gasoline stations on Saturday, just hours before President Nicolas Maduro announced higher prices at the pump that are set to end more than two decades of almost-free gasoline.
As authorities in the country with the world’s cheapest gasoline got ready to expand retail sales, the fifth cargo of an Iranian flotilla approached the Caribbean Sea and is expected to reach Ven- ezuelan waters on Sunday, according to Refinitiv Eikon.
Of 1,800 stations in Venezuela, about 240 have remained working since Maduro announced coronavirus (COVID-19) related lockdown measures in March, which included restrictions on fuel sales owing to very low inventories.
More than 1,500 stations nationwide are expected to be open in the coming days under the new system, which includes monthly quotas for vehicles and motorcycles, automated sales and monitoring equipment.
Despite the price increases, it will only cost about $1 to fill a whole tank of a vehicle under the subsidy.
After reaching their quotas, drivers will have to pay internationally indexed prices.
The remaining 200+ stations will be supplied by independent companies, so drivers buying at those sites will be charged $0.50 per litre of gas- oline and will have to pay in foreign currency.
Lines of drivers began forming at stations on Saturday in cities including Maracay, Valen- cia and Caracas in anticipation of the gasoline distribution.
Gasoline has been heavily subsidised in Ven- ezuela, which coupled with hyperinflation in recent years has made it almost free, but acute scarcity has recently encouraged a black market that has forced people to pay at least $2 per litre.
Venezuela’s refineries, which can produce more than 1.3mn barrels per day (bpd) of fuel, have worked at less than 20% of their capacity in 2020 mainly owing to power outages and a lack of spare parts.
As US sanctions imposed on Venezuelan state oil company PDVSA have also limited the sources and types of products Venezuela can import, Maduro’s socialist administration this year has turned to Iran for refining parts and fuel.
Further defiance came from the Iranian For- eign Minister who stated on Monday that Iran will continue fuel shipments to Venezuela if Caracas requests more supplies, despite Wash- ington’s criticism of the trade between the two nations, which are both under US sanctions.
“Iran practises its free trade rights with Ven- ezuela and we are ready to send more ships if Caracas demands more supplies from Iran,” Abbas Mousavi told a weekly news conference broadcastliveonstateTV.™
Week 22 03•May•2020 w w w . N E W S B A S E . c o m P5