Venezuela is buying ever more finished motor fuel from the USA. In January, it bought a record 113,000 barrels a day of the stuff. Meanwhile, it halted purchases of MTBE and special naphthas, which I previously referred to as the “good” imports. It’s grim.
Also, the US increased motor fuel sales to some of Venezuela’s normal trade partners. On the following chart, you can see that US gasoline sales to several other countries rose to their highest in years in January. (On the US side, this was offset by relatively low sales to Mexico.)
It would take a lot of research to confirm, but I suspect that what this all says is that Venezuela’s refinery situation is hurting the country even more than we all thought.
Aside from the cost of importing 113,000 barrels a day of finished motor fuel — at a price of about $2.60 a gallon, or $12.3 million a day First, there is the cost of outsourcing the refining to abroad. It sells crude for less than $100 a barrel and buys back finished motor fuel, which in the US goes for about $2.60 a gallon, or $109.2 a barrel, with shipping from the US adding to the cost. Assuming a conservative additional cost of about $15 a barrel, that is $1.7 million a day. There is also an opportunity cost that appears to be on the order of tens of thousands of barrels a day more of foregone income, again a loss of at least $10 a barrel. (Paragraph CORRECTED April 1 following reader comment.)
Just to bring this all down to earth, if this keeps up, the government of Venezuela is now spending an annualized $4.5 billion on Mission Cheap Gasoline, by far the country’s biggest social program, for the prime benefit of rich assholes with 4x4s. And it is foregoing another billion bucks a year of income, because maintaining adequate industrial safety at an oil refinery was just too much trouble. You’d think this was Pemex.