Venezuela’s government decided to postpone its fuel price hike decision, thus maintaining prices the lowest in the world. Despite extremely difficult economic situation, the authorities of this Latin American nation decided to go public with the issue, Itar-Tass said citing United Socialist Party of Venezuela representative, Ramon Lobo.
One liter of high-octane gasoline costs 9 centimes, while filing up one tank in Venezuela costs 4.5 bolivars. The official exchange rate for the U.S. dollar is 6.3 bolivars. Thus, the Venezuelans pay just 75 U.S. cents for a 50-liter gasoline tank. Meanwhile, production cost of high-octane gasoline is 28 times higher than its output price. Yet, the selling price has been unchanged for 17 years.
Along with that, Venezuela’s President Nicolas Maduro cannot cope with the ongoing economic crisis in the country. The public debt is 70% GDP, while budget deficit is 13%. There is also hyperinflation in Venezuela that made the government devalue the national currency five times. However, devaluation could not prevent consumer prices from growing. It resulted in a 54% increase in consumer prices last year.
From February 2014 there are ongoing anti-government protests in Caracas. During that period, dozens of people became victims of clashes between demonstrators and law enforcement officials and supporters of Maduro. Mass protests broke out across the country after the brutal repression of peaceful protests held by Venezuelan students. The demonstrators express dissatisfaction with the economic crisis in the country, rising prices and shortage of essential goods, and also require policy changes and the release of the detained participants of protests.