Confusion Reigns in Venezuela on First Day of Higher Gas Prices

(Bloomberg) -- In the first day of higher gasoline prices in Venezuela, it's hard to say who's more confused. The attendants at the pump? Or the drivers.

The good news is that there's visibly more gasoline being pumped from fuel stations in the capital Caracas than in the previous weeks and months. The bad news is that lines are still miles-long and if you're lucky enough to get to the front, many stations are facing problems accepting bank card transactions or scanning special cards meant for subsidies.

“I've been here since 4 a.m, and hope to fill with subsidized gasoline,” said Marcos Rojas, an engineer at a station in Southeastern Caracas. He was the first in line at 7 a.m. and the station, secured by police and the pro-government militia, hadn't opened.

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The manager was waiting for instructions from state-run energy company PDVSA on how to work the different payment methods. “I haven't received any information from them and I have over 200 drivers waiting in line,” he said, asking for anonymity out of fears of reprisal.

In a nearby closed station, lines extended for over a mile, spilling into a highway. Supply was promised for later when military personnel in charge of the area authorized it. Adding to the agglomerations is the fact that Venezuela's coronavirus quarantine is being relaxed for the first time in several months on Monday.

In stations where people were able to fill up and pay, some walked into convenience stores to use the card machines while others paid in cash, at times with dollar bills.

The decision by President Nicolas Maduro to raise fuel prices starting this week represents a historic policy shift after decades of heavy subsidies that has meant gasoline has esssentially been free for Venezuelans for decades. Now, due to crippling U.S. sanctions and gross mismanagement of the domestic energy industry including refineries, fuel is in short supply and the country is depending on shipment from ally Iran to boost inventories.

As part of the plan, gasoline will be sold at two prices. For people signed up for a government subsidy program called the Fatherland Card which is linked to a biometric payment system, it will cost 5,000 bolivars (2.5 U.S. cents) per liter for about 120 liters (30 gallons) per month per vehicle. And for everyone else, gasoline stations will charge the equivalent of 50 U.S. cents a liter.

“It's rough, but what can I do? I'll have to start including gas in my family budget,” said 44-year-old Maria Fernanda, as she waited in line to fill her tank at a premium gas station. “I went to the regulated one but left, because the system keeps dropping and people couldn't pay. Here it's expensive, but at least it's not as much as in the black market.”