Venezuela’s Military Takes Over Fuel Pumps as Shortages Increase

(Bloomberg) -- Venezuela’s military seized control of gasoline pumps in at least three states, as the coronavirus outbreak deepens fuel shortages and further isolates the country from the rest of the world.

In Zulia, Carabobo and Guarico, states in the northern part of the country, soldiers displaced PDVSA personnel and private managers at gas stations, according to people familiar with the situation who asked not to be identified as the matter is not public. A state-owned fuel distribution plant in the center of the country is at very low levels, they added.

The takeover comes as President Nicolas Maduro ordered the entire country to enter quarantine as the number of coronavirus cases doubled to 33 early this week. The country’s armed forces are heading the effort and enforcing strict controls at state borders and on the capital’s streets.

The president also has recommended the closure of all fuel stations except those of strategic importance, in an effort to minimize crowds in public spaces during the outbreak and ration gasoline, according to a document distributed by a PDVSA subsidiary and seen by Bloomberg. The document signaled that fuel shortages may worsen in the short term and instructed military personnel to conduct an inventory of fuel and prioritize supply to health, food, and public utility sectors.

Venezuela depends on imported fuel to keep public and private transportation running, as its refineries are operating at less than 15% of installed capacity. The country’s last fuel cargo -- a 350,000-barrel load of high-octane gasoline -- arrived three weeks ago, according to a person familiar with the shipment. Venezuela usually receives one gasoline cargo every two weeks.

Petroleos de Venezuela SA, the state oil company, didn’t immediately return a request for comment.

In Carabobo, an industrial hub of the country, only a handful of stations will remain open while in Guarico, a cattle and farming state, only one gas station will keep operating, the people said. Open stations are now prioritizing service to security vehicles, as well as those transporting food and health supplies, they added. The closure of fuel stations increased the price of smuggled gas to $1 per liter in Carabobo and Guarico, the people said.

Long hours and even days of waiting in line at filling stations are common for Venezuelans since U.S. levied sanctions against the country over a year ago, adding to shortages already caused by falling oil production in the country.

©2020 Bloomberg L.P.