12 cent gas [View All]

[lame54]

http://www.michaelmoore.com/words/latestnews/index.php?id=11676
June 16th, 2008 7:47 pm
Venezuela: Land of 12-Cent Gas

By subsidizing gasoline, Chávez spreads the oil wealth. But the cost of those cheap fill-ups is becoming hard to ignore

By Peter Wilson / BusinessWeek

Global oil prices zoomed up to $135 a barrel this past week. But that doesn't worry Roberto Morales, a 33-year-old Venezuelan businessman. Morales, who drives a compact Volkswagen Gol, still pays only $1.32 to fill up his car with 11 gallons of high-octane gasoline, thanks to Venezuela's subsidized fuel price.

"This is crazy but I'm not complaining," says Morales. "Gasoline here is cheaper than water."

He's not exaggerating. Gasoline prices in Venezuela are the cheapest in the world—1/15 the price of a liter of bottled water, and 1/25 the price of a liter of milk. Since 1998, Venezuela has kept the price of gas fixed at 0.097 strong bolivars a liter, or about U.S. 3¢ (lower octane is 0.070 strong bolivars). That means that consumers pay about 12¢ a gallon, or 1/33 of what their U.S. counterparts pay.