Energy Crisis? Venezuela gas is cheaper than water

CARACAS, Venezuela – Taxi driver Jaime Tinoco works the streets of Caracas in a 1976 Chevy Nova that guzzles 19 gallons (72 liters) of gas a day. But he doesn’t worry about fuel efficiency — filling his tank costs just $2.30.

While U.S. consumers struggle with soaring energy prices, Venezuela’s gas is now the world’s cheapest at 12 cents a gallon and Washington’s regional foe, President Hugo Chavez, vows to maintain subsidies that keep fuel dirt-cheap.

“Those gringos have everything — so why does their gas cost so much?” asked Tinoco between chuckles as he navigated a midday traffic jam. “Don’t they have oil reserves?”

Chavez, a self-proclaimed socialist and critic of President Bush, has even begun subsidizing fuel for poor U.S. neighborhoods as U.S. consumers brace for average summer gas prices of $2.71 a gallon — 34 cents higher than last summer.

In Venezuela, the world’s No. 5 oil exporter, drivers fill their tanks for less than the price of a cheap breakfast, and love to point out that gasoline costs less than mineral water.The nation’s gasoline is now the world’s cheapest, according to an International Monetary Fund report released in April that shows Venezuelan gas prices as about a third of those in oil-producing giant Saudi Arabia. Shiny SUVs and rusty 1970s-era sedans share the streets of Venezuelan cities as drivers shrug off fuel costs. Low-priced fuel is considered a birthright in Venezuela, which sells 1.2 million barrels per day of oil to the United States — the world’s biggest gas guzzler. “Gasoline should stay cheap the way it is, that’s why we have oil in Venezuela,” said Maria Rosa Pinero, 55, a housewife, filling up a Volkswagen Gol at a gas station in eastern Caracas. Chavez has extended Venezuela’s fuel subsidy to poor Americans through a well-publicized jab at the U.S. government that offers 40 percent discounts on heating oil distributed by Venezuelan-owned refiner Citgo.

Flush with cash from high oil revenues, Chavez has also shored up regional alliances by providing low-priced fuel to Central American and Caribbean nations he says have been snubbed by the United States.