Venezuela gas jumps to 15 cents a gallon

CARACAS, Venezuela — An air of caution and concern hung in the air as gasoline prices in Venezuela shot up Friday to 15 cents a gallon — a paltry amount elsewhere but a startling increase in this oil-rich yet financially beaten country.

The price had been less than a tenth of a penny per gallon the day before, and history showed how abruptly Venezuela’s mood could shift when the price of gasoline was adjusted upward. More than 1,000 people were killed in a weeklong riot in the late 1980s when there was an effort to raise prices.

But this time, Venezuelans seemed stoic in the face of higher gas prices, announced earlier in the week by President Nicolas Maduro. Even with the increase, Venezuelan gas is still the cheapest in the world.

Pedro Gonzalez, who operates a government-owned gas station in the poor Guarenas section of Caracas, where the 1989 riots began, said motorists were acting “normally. … There is enough inventory to take care of everyone. Nothing irregular has happened.”

Many in this oil-rich nation believe cheap gasoline is their birthright. In 1989, the effort to raise gasoline prices touched off a series of bus fare hikes that in turn provoked the “Caracazo” riots in the capital that left as many as 1,200 dead.

Fearful of stoking violence again, governments since then have only raised the price once, keeping it frozen since 1994. Inflation over the years has reduced the real value to virtually nothing.

But the subsidy has been costly. The state-owned oil company PDVSA estimates that artificially cheap gasoline was costing the government $12 billion per year. As much as 10 percent of Venezuelan gasoline is sold as contraband in Colombia and Brazil because of the huge profit for smugglers.

The price increase is expected to reduce the government subsidy by $2 billion, a savings that will be applied to importing more food, Maduro said. Scarcities of basic foods are forcing Venezuelans to wait for hours in line to buy groceries.