HomeNewsAnalysisDespite Vast Oil Reserves, Venezuela Smuggling Gasoline From Colombia, Brazil
ANALYSIS

Despite Vast Oil Reserves, Venezuela Smuggling Gasoline From Colombia, Brazil

COLOMBIA / 15 MAY 2020 BY VENEZUELA INVESTIGATIVE UNIT EN

Despite having the world's largest oil reserves, years of mismanagement and theft have led Venezuela to a bizarre turn of events. Gasoline is so scarce in the country that, in recent months, smugglers have been bringing it in from Colombia and Brazil, a complete reversal of traditional routes.

Colombian officials in the northern border departments of La Guajira and Norte de Santander first began to warn about the black market fuel trade in February. The governor of La Guajira, Nemesio Roys Garzón, told Colombian President Iván Duque that several stations were empty, presumably due to the quantities being smuggled to Venezuela, according to Vanguardia.

The remote stretches of road between La Guajira and the Venezuelan state of Zulia have become hotspots for fuel smuggling.

Trucks loaded with Colombian gasoline have been seen driving through small settlements in the municipality of Maicao, in La Guajira, before crossing into Venezuela and reaching the town of Maracaibo, the capital of Zulia state, Voice of America reported.

SEE ALSO: Coverage of Oil Theft

Black market gasoline vendors, known as "pimpineros," are commonly seen with their tanks in Zulia, residents told InSight Crime. According to them, Colombian gasoline stands out by its clear, yellowish color, whereas Venezuelan gasoline is darker, with a reddish tint. According to media reports, this difference is due to Colombian gasoline having a lower octane rating.

Smuggled Colombian gasoline sells for a reported $1.50 per liter on the black market, about a dollar cheaper than Venezuelan gasoline, which costs about $2 to $2.50 per liter. A local official in Zulia told InSight Crime that smuggled Colombian gasoline is often mixed with red hydraulic oil to give it a darker color in an attempt to increase its price.

Zulia's neighboring state of Táchira is also receiving smuggled gasoline from Colombia, officials told InSight Crime. One route sees fuel containers move out of Villa del Rosario in Norte de Santander, cross the border via remote trails into the municipality of Bolívar and then reach the towns of San Antonio del Táchira and San Cristóbal in Venezuela. 

InSight Crime found that a significant amount of black market gasoline in Táchira is sourced in Colombia and sells for as high as $1.50 per liter. This compares to an average price of $0.53 per liter in Colombia as of mid-May, showing the lucrative potential of reselling the gasoline in Venezuela.

It is uncertain to what extent this practice has spread beyond Venezuela's border states. Journalists and farmers in Lara and Mérida -- states that are farther east -- told InSight Crime that they had not seen the resale of foreign gasoline in their area. But given the demand for gasoline in Venezuela, the black market fuel trade is likely to spread.

Similarly, fuel smuggling has been seen at the Brazil-Venezuela border, though seemingly to a lesser extent. In mid-2019, El Pitazo first reported that a band of gasoline smugglers, known as the "Talibanes," were crossing into Brazil and buying gasoline for less than $1 a liter in the town of Pacaraima, in Roraima state. They then returned to Venezuela, where they sold the gasoline at over $2 a liter in the municipality of Gran Sabana in Bolívar state.

In March 2020, smuggled Brazilian fuel along this route, selling at $4 to $6 a liter, was increasingly found to be used to run illegal gold mining machinery, El Pitazo reported.

InSight Crime Analysis

The presence of foreign fuel on Venezuela’s black market was once unthinkable. For years, its gasoline was smuggled into Colombia and Brazil to be sold on black markets there.

But security forces are paying attention. One official in Zulia said that where before, Colombian gasoline was sold openly on the streets, gangs are now being more cautious. There have been instances of Bolivarian National Guard (Guardia Nacional Bolivariana -- GNB) troops robbing smugglers and reselling the gasoline themselves. Instead, they now reportedly communicate with potential buyers through WhatsApp or intermediaries.

SEE ALSO: Tankers Go Dark to Help Venezuela Evade Oil Sanctions

Corruption and mismanagement within Venezuela's state-owned oil company Petróleos de Venezuela (PdVSA) have led to collapses in production. Meanwhile, US sanctions have severely limited exports of Venezuelan oil and investment in its refining infrastructure.

José Guerra, a former official of Venezuela’s Central Bank and current congressman, wrote in late March that Venezuela's current consumption of gasoline and diesel fuel stood at about 150,000 barrels per day. With the country's refineries now only producing 40,000 per day, another 110,000 barrels were needed from imports.

Reports about Venezuela's oil production vary widely and InSight Crime was not able to independently verify Guerra's claims.

With US sanctions also making it more difficult for Venezuela to import the required volumes of gasoline, fuel shortages are likely to worsen, providing even more opportunities for smugglers.

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