Another One Rides The Bus
We’ll head Down The Rabbit Hole shortly but first… The headliner of today’s post is a thinly veiled Weird Al reference (I know, I’m dating myself). AP had an article on something I’ve known about for some time. It’s ‘El Bus TV’. They are a group that wanted to bring factual news to the Venezuelan people since the government has put a stranglehold on all traditional forms of media. They do this by getting on buses, holding up a cardboard cut-out of a TV screen, and giving the bus passengers a quick rundown of the day’s actual news regarding what’s happening in Venezuela. I’m glad to see they’re still around although their reach is not just limited by the fact that they only reach bus riders but by the fact that these days only one out of ten buses in Venezuela are in operation. In this instance the government’s ineptitude works in their favor. Hats off to the brave purveyors of ‘El Bus TV’!!
There have been a number of reports about the violent clashes at the Colombia/Venezuela border recently but this one caught my eye because it wasn’t just the usual ‘everybody blaming everyone else’ for the violence. Al Jazeera reports that a FARC dissident group is going to war with border gang ‘el Tren de Aragua’, a group that facilitates illegal border crossings for migrants. Coyotes (the guides) have been warned that working with ‘el Tren’ is punishable by death. Is it just me or do you think we have a case of somebody not getting paid?
We can’t let a day go by without a coronavirus update from the Chavistas. Maduro now says Venezuela will receive COVAX vaccines in August. Is it possible that all that smoke and mirrors about all the vaccines from Russia,China, and Cuba being the solution didn’t quite work out. On a personal note, my Venezuelan brother and his wife have managed to get vaccinated even though they aren’t Chavista. Good News!
As we deal with whiplash from the conflicting back and forth messages coming out of the Maduro regime regarding the business community we now have this. Merco Press reports that Argentina is the second worst country in Latin America in terms of foreign direct investment. This shouldn’t surprise anyone that follows what happens in Argentina. Now that the pendulum has swung back in favor of the socialists down there a lot of companies are moving next door to business friendly, and much more stable, Uruguay. It is also no surprise that while Argentina is second worst in foreign direct investment the worst is…. drum roll please… Venezuela! ( you can tell every time I talk about another country being second worst I’m about to talk about Venezuela being the worst. Could that be because in most categories Chavismo is the worst today and in many cases the worst there ever was?)
And in the, ‘didn’t we already know this?’ category we have Oilprice.com reporting that Oil Minister, Tareck El Aissami’s oil production plans are totally unrealistic I mention this because the article reminded me of something I didn’t talk about in light of Total and Equinor pulling out of their joint venture with Chavismo. It wasn’t all that long ago that even Rosneft (Russia) threw in the towel on it’s joint ventures with the Chavistas after pouring between 8 to 9 billion into them. As was said the other day “Nobody wants to work with these guys!”
And how about that article in the Jamaica Gleaner? (What! you don’t follow ‘The Gleaner’?) Venezuelan government assets in Jamaica have been placed in receivership. These are mostly monies owed to Caracas and will be paid to Conoco Phillips due to a court ruling against Chavismo. This is just one of many cases percolating around the globe relating to expropriations and contractual disregard by “The Revolution”.
And now…Down The Rabbit Hole we go…..
…..At a cost of $0.000001 per liter or approximately $0.ooooo4 a gallon (the reference point for us gringos)an average tanker that holds 13,400 gallons is about a nickel, yes , five cents per truckload! So let’s say you can sell it for 1/2 the legal price. At that rate each tanker truck is worth about $20,000. Not a bad return for each $0.05 invested.
The only real issue for the smugglers (the military) is supply.As we saw earlier about PDVSA, production has been collapsing. A rational person (or one that cared about the Venezuelan people) would deal with the domestic supply issue first which, by the way, is a requirement for membership in OPEC (all members must meet domestic needs before exporting). Shouldn’t Venezuela,as a founding member of OPEC be held to that standard? But I digress… Even a rational crooked person would ensure that the smugglers have something to smuggle. It’s getting harder and harder for Maduro to keep the smugglers happy (remember this is from 2019) due to his determination to keep shipping oil/gasoline to Cuba, who keeps him propped up by dominating his internal security apparatus.
While gas rationing has been in place for a while in some states people wait in line for days to gas up in others. At the same time Maduro is sending tankers full of oil to Cuba.When a tanker captain (who actually had a conscience) refused to pilot his ship to Cuba,in light of US sanctions, SEBIN security forces boarded the tanker and replaced the captain with one more Chavista friendly.Another sanctions evading method is turning off the ship’s transponder when they near other country’s territorial waters en route to Cuba to avoid detection and therefore seizure. They have also had,and paid for, gasoline shipped direct to Cuba when they couldn’t produce it. How’s that for a slap in the face to the Venezuelan people waiting in gas lines?
Summary : This won’t take long.In 2019 gasoline was for all intents and purposes free in Venezuela. The price didn’t remain low to benefit the people.As we’ve seen, Maduro shows nothing but disdain for them but he does need to keep the military happy.Funny how being able to smuggle tanker trucks full of gasoline to Colombia that cost a nickel and can be sold for $20,000 will do just that. With the Venezuelan people subject to either gas rationing or waiting in line for days to fill up how can Maduro be shipping oil/gasoline to Cuba free of charge in return for his Cuban “advisors”? The Venezuelan people deserve the same commitment from their president he shows to Cuba. The problem for them is they have nothing Maduro needs. Elections are rigged so he doesn’t need their votes and the people benefiting from oil shipments and gasoline smuggling have proven more than capable of repressing any dissent.To Maduro the Venezuelan people seem to be a necessary evil.
Update : In the two years between when I wrote this and when I was able to escape the “socialist paradise” of Venezuela some things changed although some remained the same.As bad as the gasoline shortages were it got much worse. Oil production continued to plummet despite Chavismo repeatedly telling us that “the solution was just around the corner”. The rationing became nationwide.To distribute the available gasoline the Chavistas scrapped their previous plan that they never enacted and went to a rationing system based on the last two digits of Venezuela’s government issued ID cards. If your number ended in 1 or 2 you could buy gasoline on Monday etc. This increased the gas lines to miles long because you wanted to be sure that you could reach the front of the line on your designated day and that there would still be fuel available. There were plenty of stories about people reaching the front of the line only to be told the fuel for the day had run out. “Come back tomorrow”…. “But I can’t buy gasoline tomorrow. My number says I have to buy today!”…. “Not my problem!”
Another factor was the monthly limit of 120 liters. There were still two different gasoline prices, the subsidized price and the international price. If you went over your limit of subsidized gasoline you would have to go to one of the stations authorized to sell at international prices. The international price was about $4 a liter which translates to about $16 a gallon (for us gringos). Not exactly in the realm of possibility for someone earning a monthly minimum wage of two bucks. Subsidized prices aside, Venezuela went from having the world’s cheapest gasoline (if you could get it) to having the world’s most expensive gasoline (if you could get it). It reminds me of a common saying pertaining to a lot of things. “If you think it’s expensive now just wait until it’s free!”
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