Venezuela’s new gasoline system fails to end epic lines

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Hundreds of Venezuelans queued up in miles-long lines to try to fill their cars with subsidized gasoline over the weekend, a week after President Nicolas Maduro launched a new dual-price system aimed at easing an acute fuel shortage.

Maduro on May 30 announced the new system in which motorists could purchase up to 120 liters (31.7 gallons) of gasoline at a heavily subsidized price of 5,000 bolivares (2.5 U.S. cents) per liter, and 50 U.S. cents per liter thereafter. Some 200 gas stations were designated to charge solely at the higher price.

That change effectively ended decades of heavy subsidies in Venezuela, an OPEC nation with the world’s largest crude reserves and where cheap fuel has long been considered a birthright of sorts. The new plan caused chaos and confusion at service stations across the country when it began on June 1.

While Venezuelans with resources can now wait in shorter lines at the stations tapped to charge higher prices, those seeking subsidized fuel, such as 42-year-old car mechanic Pedro Mujica, had no choice but to wait in seemingly endless lines.

“With what little I earn, I can’t afford to pay the higher price in dollars,” Mujica said early in the morning, some 13 hours after he arrived at a Caracas gas station in his 1991 two-door BMW car.

“It is unnecessary that we Venezuelans are living through such problems,” he said, with his four-year-old daughter Aranza on his lap.

Fuel shortages have plagued Venezuela for years as its economy deteriorated due to a plunge in the price of crude, its main export, as well as socialist policies that many economists criticize as misguided.

But the shortages grew more acute this year due to a near-complete collapse in the South American country’s 1.3 million barrel-per-day refining network, as well as U.S. sanctions designed to force Maduro, a socialist, from power.

Maduro launched the new gasoline system after receiving five shipments of fuel from Iran, another U.S. adversary whose oil sector is under sanctions by Washington. But the government has not provided details of how much arrived through the shipments.

This article was originally posted on finance.yahoo.com/news/.
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