Despite being rich in oil, Venezuela is struggling with severe gasoline shortages. Domestic gasoline demand has fallen from 170,000 bpd before the lockdown aimed to curb the spread of the coronavirus. However, authorities are distributing only 30,000 bpd of the fuel to filling stations across the country.
The lack of maintenance and investment for years have crippled state oil company PDVSA’s ability to produce the fuel. PDVSA’s refinery network could produce 1.3 million bpd of fuel, but the company’s latest document showed those refineries only produced 7,000 bpd of gasoline in March, by processing just 101,000 bpd of crude.
Venezuela has swapped its crude exports for imported fuel as payment. However, US sanctions on Russia’s Rosneft, Venezuela’s main swap partner, disrupted the practice. Washington also pressured other Venezuela’s partners such as Spain’s Repsol, Italy’s Eni, and India’s Reliance to cease gasoline supply to the South American country.
PDVSA has received materials from Iran to restart the catalytic cracking units at the 310,000 bpd Cardon refinery and the 146,000 bpd El Palito refinery, which are expected to ease the gasoline shortages. At least five tankers carrying Iranian fuel are currently sailing toward Venezuela. The US is weighing a response to the supply of the fuel.
