Venezuela to announce change in fuel policy 'soon'

By Reuters

Feb 13, 2015 11:47 PM EST

Venezuela will announce a change of policy soon on gasoline, the finance minister said in an interview broadcast on Friday, signaling the OPEC nation is moving ahead with along-awaited hike in the world's cheapest fuel.

Gasoline is so heavily subsidized in Venezuela that one U.S. cent buys about 5 gallons, costing the government as much as $12 billion annually and spurring a lucrative business in smuggling fuel across the border to neighboring Colombia.

President Nicolas Maduro has suggested a fuel price hike as a means of improving state finances amid a tumble in crude prices, but has repeatedly balked at doing so because many Venezuelans view cheap fuel as a birthright.

"Soon there will be important announcements on the issue of gasoline," Marco said in an interview with regional television network Telesur. "A piece of candy cannot cost more than a liter of gasoline."

The announcement, slammed by opposition sympathizers via social media, came on the eve of the carnival holiday during which Venezuelans are often on vacation.

It also followed a 70 percent currency devaluation launched on Thursday.

Venezuela has for decades subsidized gasoline and diesel for local consumption. A gasoline price hike in 1989 helped trigger three days of rioting that left hundreds and perhaps thousands dead after.

Fuel prices were raised in 1997 without any violent protests, but late socialist leader Hugo Chavez kept prices low throughout a decade-long oil boom.

Years of double-digit inflation have steadily chipped away at price to the point that drivers routinely leave more in tips to gas station workers than they pay for fuel.

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