Venezuela’s fuel price hike will cost the government more than $1 billion a year, according to an economist with the Venezuelan Association of Oil Exporters.
This will have an impact on the economy, and on the country’s ability to finance the budget deficit, said Rafael Ponce, who is also an associate professor of economics at the University of La Paz in La Paredda, in a statement published on Monday.
“If this price increase had been avoided, the government would have paid the full amount to the state of the national currency,” said Ponce.
“However, since the increase will have the effect of reducing the exchange rate of the bolivar from 6.5 bolivars to 5 bolivos, the increase is expected to result in a reduction of approximately 4% in the countrys gross domestic product.
This reduction will have a negative impact on inflation.”
Ponce said that the price increase will result in the loss of an average of 8,000 to 10,000 jobs, which will have to be replaced with new ones, and a rise in the prices of basic goods such as food and energy.
The Venezuelan government has been struggling with a series of shortages and political turmoil, as the OPEC nation struggles to balance its economic interests with those of its population.
Venezuela has a massive budget deficit and is struggling to cover the costs of food imports with oil revenues.
The country is also in debt to the International Monetary Fund (IMF), which is the largest creditor in the world, which is expected, in the long run, to take a larger portion of Venezuela’s debts than any other country.
Despite the political turmoil and economic woes, Maduro, the country, and the country in general, continue to rely on imports to maintain its economic and social stability.
While the country has been in the news due to political turmoil in recent weeks, it has also seen an increase in imports of fuel.
The Venezuelan government recently announced that it will raise its fuel price from the current 7.5 Bolivars (about $2.30) to 12.5 ($3.00) Bolivos.
This will result, according Ponce’s analysis, in an increase of 4% of the country s GDP in 2020, which would result in an additional $1.5 billion in the national budget deficit.
Poure’s analysis comes after the Venezuelan government last week announced that they will begin importing diesel from the United States, a move that will further reduce their imports from the U.S. In an effort to keep the oil industry in the black, Maduro and the government have been increasing their purchases of gasoline, which accounts for almost 90% of Venezuela s imports.
But this latest fuel price increase, as well as the increasing number of gasoline stations in Venezuela, have raised concerns among oil exporters.
For their part, Venezuela’s oil exporter, Chevron, has said that it plans to ramp up production of oil from the country if Venezuela can increase its fuel prices.
Earlier this month, a delegation from the Organization of Petroleum Exporting Countries (OPEC) met with Venezuelan President Nicolas Maduro and other members of his Cabinet, to discuss how to manage the crisis, according a statement from the group.
According to the statement, the ministers agreed that OPEC members should increase their production of crude oil from Venezuela to at least 30 million barrels a day (MBd) by mid-2018, and should increase the production of gasoline from at least 20 million to 30 million bpd by 2019, as part of the agreement.
At the same time, the Opec members agreed to hold the oil price at the current level of $50 per barrel for the foreseeable future.
OPEC members are set to meet in Vienna on February 27, where they will discuss how they will manage the economic crisis in Venezuela.