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Venezuela giving free gas to gas stations

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Carlos Garcia Rawlins/Reuters

(Read caption) Oil workers operate a petroleum area run by Venezuelan state oil company PDVSA in Morichal, Venezuela. Venezuela's oil reserves are now considered to be the world's largest.

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Well, it had to happen, the price of gasoline has been frozen so long (13 years) and the margin PDVSA gives gas station owners is so tiny that over two months ago the company decided it was not even worth collecting the small difference. Thus, PDVSA is now giving away gasoline to gas station owners for free, according to a Sunday El Universal article.

This is just another symbolic event in the economic idiocy of the Bolivarian revolution, a company that needs billions of dollars to invest in maintaining its level of production, gives over ten billion dollars of free gasoline each year. In this way the richer you are, the more of a subsidy you get. Talk about regressive.

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We will no longer need to make calculations of how much the subsidy is, cost of opportunity and the like. It is rather simple, the subsidy now is everything, multiply 800,000 barrels a day, times the cost of a barrel in production or in the world markets, and that is what this idiotic policy costs the company and all of us.

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--- Miguel Octavio, a Venezuelan, is not a fan of Venezuelan President Hugo Chavez. You can read his blog here.