(Energy Analytics Institute, Pietro D. Pitts, 1.Oct.2015) – The smuggling of Venezuelan gasoline to Aruba and other countries will continue as long as a large gap between gasoline prices exists, said EnergyNomics President Carlos Rossi in an interview in Houston, Texas.
“Contraband is a way to keep the military happy and loyal. With the increase in government seizures, the smuggling business of smaller smugglers is being affected.”
The Venezuelan government must increase the price of gasoline to halt or slow the smuggling and contraband business. Besides, increasing gasoline prices is good for following reasons: 1) it would be anti-inflationary, like a tax, 2) it solves or helps fiscal deficit, and 3) it assists PDVSA accounts, said Rossi.
“However, an increase in the price of gasoline can be seen as a case of a positive economic policy that will cause negative political backlash.”
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