HomeNewsVenezuela Oil Crisis May Set Limits on PDVSA Impunity
NEWS

Venezuela Oil Crisis May Set Limits on PDVSA Impunity

ELITES AND CRIME / 25 FEB 2021 BY VENEZUELA INVESTIGATIVE UNIT EN

Venezuelan officials may have finally met a PDVSA corruption scandal they cannot allow to go unpunished, hinting at just how dire the country’s oil and gas shortage has become.

In early February, Attorney General Tarek Saab ordered the arrest of four officials of Venezuela’s state-owned oil company Petróleos de Venezuela (PdVSA), including the president of one of its subsidiaries, Jacob Grey, on charges of corruption and oil theft.

In September of 2020, Grey was appointed as head of PDVSA Gas Comunal, which distributes liquefied petroleum gas (LPG) to regular citizens. Since then, he allegedly colluded with the managers of filling plants in order to siphon off and sell thousands of cylinders of the substance.  

SEE ALSO: Despite Vast Oil Reserves, Venezuela Smuggling Gasoline From Colombia, Brazil

Media reports stated that at official subsidized prices, each LPG canister is supposed to cost just $0.02.  However, Saab told reporters that the perpetrators of this scheme used armed men to coerce gas distributers into buying stolen canisters at prices ranging from $10 to $40.

Many Venezuelans are not connected to a natural power grid and therefore rely on LPG for gas, mostly used in cooking. An average Venezuelan family reportedly needs at least 2 cylinders a month, but an ongoing LPG shortage has forced many to turn to firewood instead.

As recently as 2010, Venezuela was self-sufficient in LPG and even exported to other countries. However internal shortages forced the country to start importing, primarily from the US. And, according to Argus, a media group focused on energy markets, the oil sanctions imposed in 2019 effectively cut off the country’s supply.

The corruption scheme, which exacerbated an already dire shortage, first came to light when prosecutors investigated a warehouse owner, who was illegally selling gas cylinders and found 4,000 of them on his property. The man led investigators to Grey and three of his associates, who worked as managers at filling stations around Venezuela.

“They deserve the full weight of the law,” Saab told reporters.

InSight Crime Analysis

Corruption and mismanagement within the PdVSA has been rampant for years, but it has traditionally been met by total impunity, not arrest warrants. Saab’s strong reaction and willingness to go after high-level officials demonstrates just how desperate the situation has become in the world’s most oil-rich nation.

High-level officials of the Maduro regime are often implicated in PdVSA’s money-laundering and embezzlement scandals. They face almost no consequences at least in part because, according to money laundering expert Alejandro Rebolledo, the administration itself has laundered billions of dollars, including through PdVSA-based schemes.

SEE ALSO: Why Oil Theft Spread Across Latin America During Pandemic

This time feels different. While Saab announced the arrest of the three managers, it was Maduro himself who confirmed the arrest of the PdVSA subsidiary’s president, who’d been a rising star of the PSUV party. “Our throats bleed calling for public officials to do the right thing but from behind they are robbing the country," he said.

This week, a government official told Argus that more senior PdVSA figures are involved, suggesting that the prosecutor’s office intends to back Maduro’s statements with more arrests.

Venezuela has the world’s largest oil reserves, but corruption, under-investment and sanctions have left the country with crumbling infrastructure incapable of extracting and processing those reserves.  This has put the country into such dire straits that smugglers have been bringing gasoline in from Colombia and Brazil.

share icon icon icon

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

What are your thoughts? Click here to send InSight Crime your comments.

We encourage readers to copy and distribute our work for non-commercial purposes, with attribution to InSight Crime in the byline and links to the original at both the top and bottom of the article. Check the Creative Commons website for more details of how to share our work, and please send us an email if you use an article.

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

Related Content

BARRIO 18 / 12 APR 2022

With a near unprecedented wave of arrests, the El Salvador government is doubling down and expanding on heavy-handed security policies,…

COLOMBIA / 20 NOV 2020

The staff at InSight Crime was awarded the prestigious Simón Bolívar national journalism prize in Colombia for its two-year investigation…

ELITES AND CRIME / 6 NOV 2020

Tegucigalpa mayor Nasry “Tito” Asfura -- who has announced he will run for president in Honduras' 2021 elections -- has…

About InSight Crime

LA ORGANIZACIÓN

Extensive Coverage of our Chronicles of a Cartel Bodyguard

23 SEP 2022

Our recent investigation, A Cartel Bodyguard in Mexico’s 'Hot Land', has received extensive media coverage.

THE ORGANIZATION

InSight Crime, American University Host Illegal Fishing Panel

19 SEP 2022

InSight Crime and the Center for Latin American & Latino Studies (CLALS) at American University discussed the findings of a joint investigation on IUU fishing at a September 9 conference.

THE ORGANIZATION

Impact on the Media Landscape

9 SEP 2022

InSight Crime’s first investigation on the Dominican Republic made an immediate impact on the Dominican media landscape, with major news outlets republishing and reprinting our findings, including in …

THE ORGANIZATION

InSight Crime Sharpens Its Skills

2 SEP 2022

Last week, the InSight Crime team gathered for our annual retreat in Colombia, where we discussed our vision and strategy for the next 12 months.  During the week, we also learned how to…

THE ORGANIZATION

Colombia’s Fragile Path to Peace Begins to Take Shape

26 AUG 2022

InSight Crime is charting the progress of President Gustavo Petro’s agenda as he looks to revolutionize Colombia’s security policy, opening dialogue with guerrillas, reforming the military and police, and…