Venezuela tightens grip on fuel stations after subsidy reform

Venezuelan state oil firm PDVSA has told independent gas station operators it can revoke their licences "at any time", only weeks after it cut generous fuel subsidies and as widespread shortages take hold, a notification PDVSA sent to the operators showed.

Venezuelan state oil firm PDVSA has told independent gas station operators it can revoke their licences "at any time", only weeks after it cut generous fuel subsidies and as widespread shortages take hold, a notification PDVSA sent to the operators showed. PDVSA has a monopoly over the wholesale fuel distribution market and owns almost all of the country's 1,200 service stations, although most are operated by private companies through commercial licences.

Many are suffering the effects of years of price freezes that prevented fuel sales income from keeping up with the costs of maintaining their stations. The industry had hoped the subsidy reforms and resulting price rises could revive their businesses, but the removal of licences could allow the state to take the benefit of higher pump prices.

The notification document, seen by Reuters, says PDVSA "will be able to rescind the contract unilaterally and at any time". A person familiar with the process, who asked not to be named, said so far 12 gas stations in Caracas had received the notification. PDVSA did not respond to a request to comment.

The shift is a new sign of the desperation of President Nicolas Maduro's government for hard currency as the COVID-19 pandemic and U.S. sanctions have reduced Venezuela's capacity to earn export revenue from oil shipments.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)