Inflation Hits Venezuela But The Government Keeps Gas Prices Low

Feb 21, 2019
Originally published on February 21, 2019 10:10 am
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DAVID GREENE, HOST:

So just how dysfunctional is the economy in Venezuela right now? Well, here's just one example. You can buy a whole tank of gasoline for less than you can buy an eight-ounce bottle of water. NPR's Eyder Peralta explains.

EYDER PERALTA, BYLINE: In Venezuela, it's hard to buy the basics, like food and medicine. But you can still find gasoline. Milagros Cedeno is in line waiting to fill up her 11-gallon tank. I ask her how much she pays to fill up.

MILAGROS CEDENO: (Speaking Spanish).

PERALTA: "Nothing," she says. "Sometimes, they don't even charge me." Inflation has hit 1 million percent in Venezuela, but the government has kept the price of fuel the same. So a tank of gas, for example, is about 66 of the old currency, which is how the fuel pumps still measure it. In the new currency, that would be .000048. The smallest monetary denomination is two bolivares - about 6/10,000 of a dollar, which is what Cedeno had in her hand.

CEDENO: (Speaking Spanish).

PERALTA: (Laughter, speaking Spanish).

CEDENO: (Speaking Spanish).

PERALTA: The bill is worthless. She can't even buy a piece of candy. But she can buy a tank of gas and still have 1.999 bolivares left over.

JOSE TORO HARDY: (Speaking Spanish).

PERALTA: "It doesn't make sense to anyone," says Jose Toro Hardy, one of Venezuela's leading economists. But he says it speaks to how Venezuela has been governed. Sitting on the world's largest oil reserves, Hugo Chavez rode a wave of historic oil prices to sell his version of socialism. He spent carelessly at home and abroad. And this gas, says Hardy, is the last vestige of that largesse. But no matter what happens in Venezuela, he says, things like these are unsustainable.

TORO HARDY: (Speaking Spanish).

PERALTA: He says it's time Venezuelans put their feet on the ground and face the harsh reality. Eyder Peralta, NPR News, Caracas.

(SOUNDBITE OF CHANCHA VIA CIRCUITO'S "COROICO") Transcript provided by NPR, Copyright NPR.