Venezuelans Now Lack Gas to Cook on Top of Gasoline Shortage

(Bloomberg) -- Venezuelans forced to queue for days to fill up their cars with gasoline are now facing a growing shortage of propane to cook after a processing plant caught fire and distribution is being rationed.

The Jose petrochemical complex that supplies propane used by about 90% of Venezuelans to cook has slowed production since a fire and a pipeline leakage, union leader Jose Bodas said. As a result, the military has taken control of distribution and began rationing deliveries nationwide, according to people familiar with the logistics, who asked not to be named for fear of reprisal.

Venezuela’s oil industry is facing its worst crisis ever as U.S. sanctions, the crude market’s collapse and the Covid-19 pandemic aggravate years of mismanagement and a lack of maintenance and investment. The government of Nicolas Maduro has resorted to fuel supplies from Iran as state-run producer Petroleos de Venezuela SA, or PDVSA, is unable to meet domestic demand for gasoline even though the South American country holds the world’s largest crude reserves.

PDVSA and Venezuela’s defense ministry didn’t immediately reply to requests for comment.

The production of natural gas liquids, half of which is propane, has plunged 24% this week to 35,800 barrels a day, according to one of the people. The shortage affects 4 million families, worsening a lack of cooking gas that has led many to turn to firewood.

“Supply is very low,” said Antero Alvarado, a managing partner at consultancy Gas Energy Latin America in Caracas. “It can’t meet historic demand of 60,000 barrels a day. PDVSA hasn’t been able to match the deficit with imports.”

Protesters have taken to the streets to demand propane supplies, defying security forces as the country imposes strict lockdowns to contain the spread of the coronavirus.

Early this week, more than 100 tank trucks lined up at the Jose petrochemical complex to load with propane for distribution nationwide, but the military has limited the service mostly to Caracas and its surroundings, people said.

Understaffed facilities and the lack of maintenance have caused fires and pipeline leaks since January. Natural gas production has fallen to about a fifth of 2006 levels.

The Jose complex, the only gas-processing facility currently in operation in Venezuela, has only two out of four units working, each with the capacity to process the equivalent of 50,000 barrels a day, the people said.

©2020 Bloomberg L.P.