Well, it had to happen, the price of gasoline has been frozen so long (13 years) that the margin PDVSA gives gas station owners is so tiny that over two months ago the company decided it was not even worth collecting the small difference. Thus, PDVSA is now giving away gasoline to gas station owners for free.
This is just another symbolic event in the economic idiocy of the Bolivarian revolution, a company that needs billions of dollars to invest in maintaining its level of production, gives over ten billion dollars of free gasoline each year.In this way the richer you are, the more of a subsidy you get. Talk about regressive.
We will no longer need to make calculations of how much the subsidy is, cost of opportunity and the like. It is rather simple, the subsidy now is everything, multiply 800,000 barrels a day, times the cost of a barrel in production or in the world markets and that is what this idiotic policy costs the company and all of us.
Next: PDVSA pays gas station owners to sell gasoline…
The Devil's Excrement 
October 17, 2011 at 10:38 am
Another off topic link – sorry Miguel.
http://www.eluniversal.com/economia/111017/finanzas-restringe-bonos-en-divisas-a-particulares
How the $3 billion was distributed.
Main points for those who don’t read Spanish.
The new bond for $3 billion has been awarded like this:
Individuals that asked for more than $3,000 get – ta dum – Nothing!
Individuals that asked for $3,000 or less get $1,500.
Companies that fall under category 2 fall under the same criteria as individuals. That is if they asked for more than $3,000 they get nothing.
Category 2 is for all companies that are not in the food or health sectors.
Category 1 companies (food & health) that asked for between $3,000 & $1,470,000 get 100%
If they asked for more than $1,470,000 they get – ta dum – Nothing!
Banks owned by the state got 100% with no limit.
Insurance companies owned by the government got 81.5% with no limits.
I guess we can see how this $3 billion is going to alleviate the demand & how the thieves will manipulate the winnings through the public banks & insurance companies. What a huge joke.
Caracas.-El Ministerio de Finanzas estableció los criterios para adjudicar los bonos en divisas que vencen en 2026. Los particulares que solicitaron más de 3 mil dólares no obtendrán nada y quienes solicitaron 3 mil recibirán el 50%, es decir, mil quinientos dólares.
Este criterio también aplica para las empresas que introdujeron órdenes de compra bajo la catgeoría dos, reservada para las compañías que no se desenvuelven en los sectores de alimentos y salud.
Las empresas de la categoría uno, reservada a alimentos y salud, reciben el 100% de la solicitud si el monto se ubica entre 3 mil y un millón 470 mil dólares.
Las órdenes de compra que superan este nivel no recibirán nada.
Además Finanzas estableció que los bancos públicos reciben todo lo solicitado y las empresas del sector asegurador, pertenecientes al Estado, 81,5%.
October 17, 2011 at 7:59 am
Im sure that most have read Niall Ferguson’s thoughts on Chavism but if not here’s the link
http://www.eluniversal.com/nacional-y-politica/111015/chavez-pins-venezuela-under-a-false-democracy
Particularly interesting is –
“…Our countrymen are still incapable of extensively exercising their rights on their own because they lack the political virtues upheld by true Republicans…”
The author adds that Bolívar also said that laws could not be situated above leaders and made other claims that show a side of the Venezuelan founding father that many would rather overlook.
October 17, 2011 at 8:12 am
Thanks for the link
>>>British historian and Harvard Professor Niall Ferguson pauses briefly in his most recent book, Civilization: The West and The Rest, to label Venezuelan President Hugo Chávez as just another Latin American caudillo…<<<
That is exactly spot on! Chavez is not about right, left or center. Chavez is about Chavez the demigod.
Si la naturaleza nos ayuda en llevarse a Chávez, la apoyaremos en lo que se pueda!
October 17, 2011 at 9:17 am
But talking about Bolívar: that was actually another caudillo. One thing was what he said at any given time and moment and another what he did or said next.
October 17, 2011 at 5:00 am
Loroferoz,
I won’t tell you that there are very few countries like Venezuela because you would get depressed. A journalist who worked for many years in Africa told me recently few countries were so fucked up there as Venezuela, given certain infrastructure. He said: sure, there is more money in Venezuela than in many African countries, but you don’t see such a level of decay but for – maybe – Nigeria and surely Angola.
Surprise, surprise: oil producing countries where most people have disastrous education levels.
So: you have places such as Mali or Sudan where you know you will find earth roads and huts and primitive buildings and few cars…but they are not run down. They are just poorer.
So: I won’t tell you about it.
October 18, 2011 at 2:45 am
I know for a fact that only a few countries share Venezuela’s surreal, weird and ultimately sad fate. I was not ironic. I meant several in the whole world.
And I am not depressed. I am just fatalistic about the moment in time when Venezuela “normalizes”. It cannot be but catastrophic. The famous Caracazo will seem a firecracker next to that.
I mentioned Peru and Bolivia and I could mention most of Latin America. They are “poorer”. Gasoline is comparatively expensive, but cars are reasonably priced. Health care costs, but people don’t die waiting for emergency treatment at public hospitals, and private clinics are not that hideously expensive. Salaries are low, but so rent and food. You can convert your local currency to any other on Earth. Inflation is in the single digits. The taxman collects money for the State…
Venezuela is not that poor. It’s not normal. It’s as weird as the areas controlled by drug kingpins, and that violent as well.
October 17, 2011 at 12:50 am
Time after time, I tell family and friends that there’s a sane, real world that follows sane rules, where people’s behavior looks sane, because incentives for behavior are consistent with economic and social reality. More or less.
Poor countries like Bolivia and Peru. Rich like the UK. With corruption, almost without corruption. More or less free market, or “crony capitalism”, or other systems.
Then there is my country, Venezuela (and I expect, a few others) guided by hallucinatory ideologies and managed according to fantastical expectations from the population. Magical realism falls short of an accurate description of Venezuela now. We Venezuelans have drugged ourselves with oil.
Venezuela’s return to reality shall look like a collision at orbital speeds…
October 16, 2011 at 11:38 pm
Look at the bright side. When the electricity goes off, you can run your generator for free. All you will need to buy is the motor oil for oil changes, and hearing protectors or cotton balls so you don’t go deaf. If you wet them, it is really quiet.
October 16, 2011 at 8:46 pm
REPLY to ” island canuck ”
2 years! dos anhos! conho!
– Buena noticia: Dos anhos se pasan VOLANDO!!
– Mala noticia: he will still be alive!!
sight…..
October 16, 2011 at 5:44 pm
Gasoline may be dirt cheap but motor oil is very expensive compared international prices and nobody complaints.
0.97 liter (aprox. 1 quart) of PDV 20-50 w oil may cost 35- 40 Bsf. ($ 8.14 – $ 9.3 @ 4.3 Bsf. / $) retail
http://www.pdvsa.com/index.php?tpl=interface.sp/design/readmenuprinc.tpl.html&newsid_temas=33
If you go to amazon, 6 quarts of Valvoline 5-30w cost $ 28.02 / 6 = $ 4.67)
http://www.amazon.com/Valvoline-NextGen-5W30-Conventional-Motor/dp/B0051RTQMA/ref=pd_sbs_auto5
October 16, 2011 at 5:26 pm
Today if you give less than 0,5 Bsf. tip (In caracas, 0,3 bSF. in other places) tip at the gas station you are skimpy… and a tipical fillup charge is 2,5 Bsf. ($0,58) for 30 liters (almost 8 gallons), in other words, you have to tip about 20% … and a small coffee costs 4 Bsf….
October 16, 2011 at 3:10 pm
OT:
Very interesting interview with a Venezuelan surgeon on the health of Chavez.
He says, among many other things, that he has a life expectancy of 2 years.
http://www.msemanal.com/node/4768
October 16, 2011 at 7:05 pm
interesante. gracias.
October 16, 2011 at 7:23 pm
Miguel,
Can you comment on Navarrete’s declarations? Do they coincide with information you have? Is Navarrete currently in Chavez’s payroll? If so, what motivation could he have had to come out with this kind of information that, judging for past cases, could land him in jail?
October 16, 2011 at 7:26 pm
Yes and no, basically, I am hearing its all bladder, bones me have metastized from bladder. A Doctor I trust told me it is a twelve month matter and quimio or radio do nothing.
October 17, 2011 at 6:19 am
Miguel, how do you put that together with Chávez’s visit to Cuba and his tests? Does it fit?
October 17, 2011 at 7:28 am
He says he is there for tests, nobody really knows. If it is tests, he should speak out daily, I bet he is getting chimio and we will not hear from him till Friday.
October 16, 2011 at 8:45 pm
2 years! dos anhos! conho!
– Buena noticia: Dos anhos se pasan VOLANDO!!
– Mala noticia: he will still be alive!!
sight…..
October 16, 2011 at 2:39 pm
A full tank of petrol for less than a £.
Sounds to me that free fuel is a plan to eliminate corruption at the forecourt. Next will be free food, free housing, free Polar, free arepas,free Blackberries, free tit jobs, free arse jobs and free Directv.
Living the dream, living the dream, life doesn’t get any better!
October 16, 2011 at 2:30 pm
Actually, the volumes of gasoline being consumed in Venezuela are more in the order of 400,000 barrels per day. The rest of te domestic consumption is diesel, kerosene, etc, also subsidized. Still, you are right in saying that the loss to the nation is gigantic.
October 16, 2011 at 2:45 pm
True,800,000 is thenumber of barrels of oil we consume, diesel is also being giiven away, notlubricants.
October 16, 2011 at 6:00 pm
Miguel,
Do the 800,000 barrels per day include diesel fuel used for power generation by very ineficient diesel generatyors ?
Check here for more data:
http://josealler.blogspot.com/2010/08/reuters-disminuye-exportacion-de-crudo.html
October 16, 2011 at 6:09 pm
No, my number comes from extrapolating use by numberr of vehicles and GDP growth, not new crazy assed Chavista ideas
October 16, 2011 at 1:15 pm
A negative consequence of all this craziness is that gas stations in Venezuela are crumbling down and the number of them has not kept with the growing population. I guess it’s because it makes no sense to invest in new equipment or in building new gas stations if the margins are so low and on top of that you might get “expropiado”. When I visit Venezuela this is something that I always notice. Most gas stations permanently have either long lines or really long lines at peak hours. And when you finally get to the pumps they are in such sorry states that I always hesitate momentarily to put in the car whatever fuel comes out of them. I also notice that in my home town of Valencia there have been really few if any new gas stations built in the last ten years. I also hear quite a lot about failed fuel pumps in cars. I’ve never heard about a failed fuel pump here in Spain and I hang out with car people. When I go to Venezuela, I always hear two or three such stories, or worse, experience it personally, like last year.
October 16, 2011 at 1:27 pm
I haven’t thought about this-but you are right. I would bet most of
the tanks are corroding inside…and should be replaced. How many are
leaking? This is expensive and should be done.
A warning for everyone- change your fuel filter as needed.
October 16, 2011 at 2:35 pm
I recommended do not run with near empty tank, because the motor can be damage and gas filter get more dirty very fast. I always fill my car tank at 0.5 tank.
October 16, 2011 at 11:54 am
FACEPALM!
October 16, 2011 at 11:39 am
But just think of all the money they save by eliminating the bureaucracy to bill, and collect for the gas. I think this is brilliant.
Now, if they just would give grocery stores free powdered milk and coffee, I would have one less worry. I don’t know which is going to run out first. Last week I found a kilo of unregulated powdered milk. Since powdered milk is regulated, what I got is called “Powdered Mixture of Milk and Dairy Solids.” I read the list of ingredients: “Whole powder milk, skimmed powder milk, whey powder, vitamins A and D.” For comparison I looked up the list of ingredients in regulated powdered milk. It doesn’t have a list of ingredients!
Anyway, now I have milk for a month or two. Now the Holy Grail is to find Coffee! It’s exciting to live under Socialism and the operative word is “UNDER.”
My cousin just returned from a month long tour in northern Europe. She was amazed that you could walk the streets day and night and feel perfectly safe. No one needs to lock themselves in after sundown. I remember that Caracas was like that in the distant past. Lucky for me that I don’t feel like going clubbing all night anymore.
October 16, 2011 at 12:53 pm
Captain- for a while I worked with Brits and had tea in the afternoon. My wife likes green tea. Have you tried jerba matte?
Anyway- I think right after weaning -I started coffee – half coffee andhalf milk,
Just love delicious coffee…
It bothers me -though-living here inFla. -my friend’s wife sends large package’s every month to her relatives in Venezuela- (and the shipping cost is high)-and it is -you know-simple stuff- candy, powdered milk…It drives me nuts to think about this. And then I think about those billions spent on weapons…tell me,
which is better a fighter plane or a good cup of java? Seriously.
October 16, 2011 at 1:05 pm
Charles, I love tea, green tea, jasmine tea, black tea in all its varieties. Yerba mate I didn’t like, too bitter. But for breakfast I need some coffee — to engage all the gears!
What’s really gross is that Caracas used to be a coffee plantation. In my grandfather’s days you could still find wild bushes in the Parque Los Caobos (Mahogany Park). The mahogany trees were used to shade the coffee bushes!
Sure, one can import things, but it makes no sense to destroy a country to feed the ego of one maniac. The OWS idiots don’t know what it is to live in collectivism, in communism. $20 an hour for not working. Sure, money grows on trees! Except collectivism kills the trees!
October 16, 2011 at 11:35 am
Miguel, sorry you should not use the value of cost of production, the price should be referecial marker for the Venezuelan basket to calculate the opportunity cost of the gift to domestic consumers, or else for the price of realization in the Spot market where they sell Cuban Communist our friends, which gives her oil our government, via Petro describes, I would call Chuleria Petro Caribbean.
October 16, 2011 at 11:22 am
Good morning Miguel, my son in Miami in the day yesterday replaced the gasoline tank of a compact car Aveo, in the modest sum of: $ 34, at the official exchange Bs: 147, 00, black change Bs: 289.00 I gladly would pay at the official rate, as long as it contributed to the progress of all.
But this government $ 1.5 billion gift q $ to the genocidal communist Cuba buddies should not pay for it, Venezuelans should rather ask the Government to regale us gasoline and food Mercal and PDVAL, Greetings.
October 16, 2011 at 11:08 am
MO:
What is the actual status of gas stations property? I was aware that government was expropriating most of the stations to give them to “missions” or “comunas”. So this will explain why PDVSA is given away the gas.
October 16, 2011 at 11:14 am
Many are still in private hands. As the article explains, the margin is such that was is left for PDVSA is really small, so why bother. Maybe some day they should just give it away at the gas stations too. You drive up, fill your tank. Drive away, it will be more efficient.
October 16, 2011 at 12:43 pm
That will not surprise me; in election times anything goes.
October 16, 2011 at 11:05 am
They are thick, thick, thick, thick. They are idiots. They are absolute idiots. And they are criminals.
October 16, 2011 at 11:01 am
Ha ha! I’ve seen it all now!