(Bloomberg) — Venezuela’s capital is once again rationing gasoline after production slumped at state refineries, forcing motorists to endure day-long queues to refill tanks.
Shortages have returned in Caracas, with drivers scouring the streets for open gas stations as lines stretch over blocks in some areas. Outages at Petroleos de Venezuela SA’s fuel plants have reduced gasoline production by more than 40% since the end of June, according to two sources with knowledge of the situation.
While fuel scarcity in rural areas has long been a fixture, the Maduro regime has strived to protect Caracas from such shortages. But the reappearance of long lines not seen in months indicates that the embattled government is failing on its promise to ramp up production and end the problem permanently.
Oil Minister Tareck El Aissami had promised that an increase in production would satisfy 100% of domestic fuel demand by the end of June and promised that petrol lines would “disappear”.
Still, PDVSA is struggling with the effects of US sanctions and low foreign investment, and has been hit by failures at several of its largest factories. Only two of the six refineries are currently operational, according to three individuals with direct knowledge who requested anonymity because they are not authorized to speak about the situation publicly.
Production at the Cardon refinery, one of PDVSA’s crown jewels, has fallen to 40,000 barrels per day, from 80,000 a few weeks ago. That’s partly due to a rupture in one of the storage tanks that has shut down the operation of a key unit, the people said.
Domestic demand for gasoline has fallen to about 70,000 barrels a day, from 350,000 a decade ago when the economy crumbled. PDVSA did not respond to a request for comment.
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