Venezuela cuts back diesel prices to factories after complaints
(Reuters) - Venezuela's government reduced an increase it had imposed at the beginning of the month on diesel prices to factories, after complaints from producers about the potential impact of the measure.
Venezuela's oil ministry this time set the price of diesel to factories at about 10 US cents per liter - payable in local currency, according to a resolution published on July 21 in the Official Gazette, which circulated on Thursday.
In early July, the ministry had set the diesel price to factories at 32 US cents per liter, prompting worry and complaints among companies amid rampant inflation and high costs for transporting essential goods by road.
After discussions between the private sector, PDVSA officials and several ministries, the government of President Nicolas Maduro revised the tariff, union representatives said.
Producers "insisted on the need to reduce the price of $0.32," said Luigi Pisella, president of Conindustria. "We think the response received to this request was positive."
The measure is now expected to allow Venezuela's state oil company PDVSA to charge factories for diesel at an adjusted price and in local currency, after three years of providing it for free as part of a set of measures related to domestic fuel supplies.
The government has taken measures in recent months to reduce heavy subsidies to public services and utilities, including water and electricity, which are mostly provided by state companies in a deficient or intermittent manner.
The new price does not apply to public transportation, which was excluded from the resolution.
Diesel production is insufficient to meet Venezuela's total demand due to the poor condition of its refineries, which operate at a fraction of capacity after years of lack of investment and delayed maintenance.
At the end of 2021, the government tried to adjust the price of diesel to the industrial sector to 50 US cents per liter, but the measure was not enforced.
Comments