Curious news from the workers paradise of Venezuela
From
My Way/Associated Press:
Refinery blast kills 24 in Venezuela, dozens hurt
A huge explosion rocked Venezuela's biggest oil refinery early Saturday, killing at least 24 people and injuring more than 80 others in the deadliest disaster in memory for the country's key oil industry.
Balls of fire rose over the Amuay refinery, one of the largest in the world, in video posted on the Internet by people who were nearby at the time.
At least 86 people were injured, nine of them seriously, Health Minister Eugenia Sader said at a hospital where the wounded were taken. She said 77 people suffered light injuries and were released from the hospital.
Officials said those killed included a 10-year-old boy, but that most of the victims were National Guard troops stationed at the refinery.
If Chavez is so beloved by his citizens, why does the National Guard need to be stationed at the refinery?
Oil Minister Rafael Ramirez said the state oil company should be able to "restart operations in a maximum of two days."
"We have sufficient supplies... in the entire country, and our production at the maximum to deal with any situation in our domestic market," Ramirez said. "In that sense, we won't have major effects."
An official of the state oil company, Petroleos de Venezuela SA, said the country also has enough supplies on hand to guarantee its international supply commitments. The official spoke on condition of anonymity because he wasn't authorized to speak publicly about the matter.
Note: Not restart the refinery. Restart operations -- i.e. filling tankers with their reserve oil and restarting the pumping of domestic oil through the pipelines.
One last item:
Amuay is part of the Paraguana Refinery Complex, which also includes the adjacent Cardon refinery. Together, the two refineries process about 900,000 barrels of crude per day and 200,000 barrels of gasoline. Venezuela is a major supplier of oil to the U.S. and a member of the Organization of Petroleum Exporting Countries.
So they still have refinery capacity. Here is the
Wikipedia entry for the refinery complex. I was looking to see the capacity of the Amuay complex v/s the Cardon -- haven't found it.
One major problem is that the Venezuelan government heavily subsidizes the price of gasoline -- it retails for 12� per gallon.
From the Wall Street Journal's
Market Watch:
Low gas prices plague Venezuela
As US officials consider tapping the country�s strategic oil reserves to lower gasoline prices, analysts say a price hike is what Venezuela needs to wean itself from a consumer addiction that threatens to bankrupt this oil-driven economy.
�It�s criminal how cheap [gasoline] is,� said Gonzalo Ibarra as a gas station attendant fills up his shiny silver Mercedes Benz for less than a dollar. �I pay more for the tip than the gas.�
The 64-year old lawyer is in no need of a government handout but as a wealthy car owner is one of the biggest beneficiaries of a gasoline subsidy that�s costing the state�s economy at least $1.5 billion in revenue even as it struggles to recover after two consecutive years of loss.
Mr. Ibarra is unusual in that he says he would welcome a price hike but doesn�t believe President Hugo Chavez, who is facing an election next year, could pull off such a feat in a nation where cheap gasoline is considered a birthright. �It�s a very delicate matter.�
Gasoline in Venezuela costs about 12 cents a gallon, well below the $4 a gallon or more paid in most of the industrialized world.
Chavez was no doubt weighing all of these factors when he took to the airwaves recently to lecture the nation over gasoline usage.
�Every time you fill up your gasoline tank, you�re filling it up with the cheapest in the world; and the government is subsidizing over 90 percent of what it really costs,� Ch�vez said in a television address to the nation. �We must begin to reduce gasoline consumption.�
A perfect example of the unintended consequences of tampering with the free market. When the 'masterminds' fix prices, the market adjusts but frequently in ways they never ever considered. (Paging Jimmy Carter -- President Carter to the White Courtesy Phone please).
Carter gave us horrific gas lines by fixing gas prices artificially low.
Chavez is stupidly hurting the people he is trying to help.
Venezuela's main source of income is petroleum sales. Chavez uses this money to provide entitlements for the Venezuelan poor instead of allowing them to start their own businesses. He is siphoning off oil revenues to pay for the gasoline subsidies and therefore, cutting the pool of money available for the entitlements. As very few 'poor' Venezuelans own cars, the benefits of the subsidies are lost to them.
Unintended consequences indeed. As I have said before, I really feel sorry for the people in statist regimes like Venezuela, Cuba, etc... They have such potential and are being kept down by incompetent ideologues.
Posted by DaveH at August 25, 2012 8:54 PM