Venezuela's strike heads to gas pump

Oil output is down to a trickle, with no end to the 3-week standoff in sight.

It's midnight in the city center, and Gerald Peña has been in line for half an hour. He's inching closer to the gas pumps, but estimates it will take another 15 minutes before he is able to fill up his rusty hatchback.

"In the afternoon, it was worse," he says, leaning out the driver's side window. "It was taking three hours to get gas." So, Mr. Peña waited in line while most Caracans slept.

Here in the world's fifth-largest oil producer, supplies of gas, food, cash - and patience - are running low. More than two weeks into a national strike aimed at ousting President Hugo Chávez, people here are growing desperate. Venezuela is a nation grinding to a halt.

American consumers, too, are just beginning to feel the pinch because it takes a week for oil tankers from here to reach the United States, which imports some 13 percent of its oil from here. (In recent days, the cost of crude oil futures has topped $31 a barrel). But analysts say a protracted strike will bring higher prices at the pump, and a greater reliance on Middle East supplies at a time when a war with Iraq could take even more oil out of production.

"There has been a very slow price reaction, that's true," says Sarah Emerson, managing director of Energy Security Analysis in Wakefield, Mass. "But the disruption will become increasingly serious in the next two or three weeks as we begin to look for alternative supplies and at strategic reserves."

Before the strike, Venezuela was producing about 3 million barrels a day, 12 to 15 percent of the OPEC output. Currently, it is producing less than 400,000 barrels per day.

"That's a significant problem for the oil supply all over the world," says Fernando Martínez, Venezuela's former transport minister, now in business for himself in Caracas. "And it's especially critical at this moment, with the world's concerns over Iraq."

Other members of the Organization of American States (OAS) have offered to make up Venezuela's canceled petroleum deliveries to foreign clients. And the US Energy Department approved requests this week from several oil companies to delay delivery of crude oil into the Strategic Petroleum Reserve.

For his part, President Chávez is attempting to restart idle oil refineries while fighting for his political career. Experts say that without the support of the oil industry - considered the pride of Venezuela - Chávez is in deep trouble.

In a rambling speech yesterday, Chávez vowed to fire more of the "coup-plotting oil elites" who are leading the shutdown of the government's oil company, Petroleos de Venezuela (PDVSA).

Chávez's comments came hours after the Supreme Court ordered the government to relinquish military control of the capital city's police force, which the military has had since Nov. 16, and return control to anti-Chávez Mayor Alfredo Pena.

But the strike at PDVSA is the key. PDVSA produces 87 percent of the country's oil and gas, and accounts for 70 percent of the government's revenues.

The price of gas in Venezuela is regulated and thus remains stable, but supplies are dwindling and lines are growing. The country has few gasoline-storage facilities because no one ever expected an oil-flush nation would need them. Other important sectors of the economy, such as mining, require natural gas for production - and without it they are being forced to shut down. In addition, many domestic commercial flights have been canceled.

Other businesses are being affected indirectly. Dr. Martínez says he just got off the phone with a manager at a major Venezuelan bank who is unable to transport money because he can't find diesel fuel for the trucks.

"All segments of the economy are feeling it very strongly, in spite of what the government says," he says. "They know that this is very critical."

As more and more shops shut down in support of the strike, worried residents are stocking up on groceries and other necessities. To prevent hoarding, Chávez yesterday ordered military officials to seize any vehicle delivering gas or food. Opposition leaders claim they are allowing enough basic supplies through their blockades to meet the population's needs. But there is talk of power outages in parts of Caracas. And every day there are protests and marches in the streets.

Ricardo Hausmann, an economics professor at Harvard University and former Venezuelan planning minister, says the situation was inevitable. The economy has been in a tailspin since Chávez took power in 1998, contracting 15 percent - a full 7 percent of that coming this year alone.

"This is completely unprecedented for us," he says, "because essentially we have a president who's trying to lead a country in a radical course for which he has no mandate: destroying the economy and a sense of shared values."

Mr. Hausmann says it's hard to imagine a resolution to the crisis with Chávez remaining in power. He believes the president, in true Latin American fashion, wants to be overthrown rather than beaten at the ballot box.

Chávez's opponents, including a broad coalition of businesses, labor unions, and media groups, are calling for early elections. He has rejected such calls (including one from the Bush administration last week), noting that the Constitution doesn't allow a vote until August.

The OAS is attempting to mediate but with little success to date. Russia and Brazil have offered to mediate, too. Concern is growing that the crisis may turn violent.

While the opposition against the left-leaning Chávez swells, some Venezuelans are still strongly behind him. They say his mandate for power came in 2000 when he was reelected with 57 percent of the vote.

"It's the coup plotters' fault that we are in this situation. They should all be sent to Miami," says Gilberto Arvelo, an electrical engineer who has finally reached the gas pump and is filling his shiny SUV. "The majority of the country is satisfied with Chávez."

Polls, however, show otherwise. Where the president used to command 80 percent support, he now garners about 30 percent. Those numbers could fall even further as the lines for gas grow even longer.

Material from the wire services was used in this report.

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