HomeNewsBriefVenezuelan Govt Announces New Plans to 'End' Fuel Smuggling
BRIEF

Venezuelan Govt Announces New Plans to 'End' Fuel Smuggling

CONTRABAND / 2 MAY 2013 BY JAMES BARGENT EN

The Venezuelan government has declared it will launch a renewed assault on gasoline trafficking in the Colombian border region, but the measures announced so far will do little to deter a trade that is directly linked to the government's looming fiscal problems. 

On a visit to the the northern state of Zulia, Vice President Jorge Arreaza announced the new Maduro administration would "definitively end this phenomenon by attacking the structural causes."

The first aspect of the new strategy to be announced was an expansion of the controversial electronic rationing of gasoline, which sparked protests when it was introduced in Zulia last year, reported El Universal.

The system, which operates in the border states of Zulia, Tachira, and Apure, sees cars fitted with a barcode that registers each time they buy gasoline and ensures they do not exceed a monthly limit.

While in Tachira and Apure, most gas stations are now fitted with the system, in Zulia less than half have the equipment.

The new plan will also involve offering economic incentives to smugglers to abandon the trade.

InSight Crime Analysis

Oil lies at the core of the Venezuelan economy, and petro-dollars have bankrolled the social spending behind the Chavista political project that Maduro is trying to keep alive.

However, this reliance has created a political timebomb. The government’s finances are strained by increased spending commitments coming at a time of plummeting oil production, a drop in exports, commitments to supplying cheap oil to political allies, fuel subsidies, and the gasoline smuggling those subsidies encourage.

If Maduro were to increase gasoline prices or end support for allied countries, it would cause political uproar at a time when his leadership remains far from secure. In contrast, tackling smuggling is a much less politically risky move. However, the measures proposed so far are unlikely to touch the real driving forces of gasoline smuggling -- transnational criminal operations such as the Rastrojos and corruption in the Venezuelan National Guard, who for the right price will wave through bulk contraband shipments.

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