Venezuelan Government Commits to Anti-Fuel Smuggling Strategy

The Venezuelan government has reiterated its commitment to implement the electronic tagging of cars to combat contraband in fuel sales, despite an opposition campaign against the initiative. 

By Ewan Robertson

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Mérida, 20th July 2012 (Venezuelanalysis.com) – The Venezuelan government has reiterated its commitment to implement the electronic tagging of cars to combat contraband in fuel sales, despite an opposition campaign against the initiative.

The initiative, known as the Fuel Automation Plan, involves installing an electronic chip on vehicles to record how much fuel they load up on, and is only being implemented in the frontier states of Zulia and Tachira, which border with Colombia. Both states have opposition-aligned governors.

The idea is to prevent users from loading up on Venezuela’s heavily subsidised petrol, then crossing the border to Colombia to sell it at a far higher rate.

Oil minister Rafael Ramirez said on Wednesday that the system, which has already been introduced in Tachira and two municipalities of Zulia, is saving Venezuela almost US $40 million per month.

Speaking at a press conference in Zulia, he said that in just the two Zulia municipalities, where 12,500 cars have had the chip installed, fuel consumption has reduced from 14 million to 8 million litres per month.

The minister confirmed that including progress made in Tachira, “56 million litres have been taken away from contraband each month…fuel that’s robbed, that belongs to the Venezuelan people, [and] that’s for our development”.

Opposition Campaign

Venezuela’s conservative opposition, particularly in Zulia state, have strongly opposed the implementation of the Fuel Automation Plan.

On 9 July, presidential candidate for the conservative MUD coalition, Henrique Capriles Radonski, called the measure an “imposition” and describing it as “the government transferring its incapacity to control the border onto the people”. He promised to eliminate the system if elected on 7 October.

Yesterday the legislative council of Zulia state, where the opposition has a majority, formalised its opposition to the initiative, arguing that “the inhabitants of Zulia aren’t smugglers” and blamed contraband activities instead on Venezuela’s state oil company PDVSA and the national armed forces.

On Wednesday this week, regional Zulia station Global TV reported that the chip system had been deactivated in seven gas stations in the Zulian capital Maracaibo, with the government citing “technical reasons” for the move.

Regional opposition politicians have declared this as a setback in the implementation of the plan, with spokesperson Lestor Toledo of the Popular Will party claiming a “citizens victory” and that “we put the national government against the wall”.

Continued Commitment

In his press conference on Wednesday Minister Ramirez urged media sources not to join an opposition disinformation campaign aimed at creating “anxiety” in the country. “Let’s have automation without trauma and only in the border states,” he said.

He confirmed that by the end of this year the system will be installed in 156 gas stations across these states, and only fully activated once more vehicles have the chips installed. Over 233,000 vehicles already have the device.

Venezuelan president Hugo Chavez responded to Capriles’ criticism last week, saying that resistance to the initiative represents the “hypocrisy of the bourgeoisie” considering that the plan is already functioning in Tachira state without problems.

He further called the Fuel Automation Plan a measure aimed at preventing queues and shortages at gas stations, and “a control measure to supply fuel, almost free, to those who really need it and so that nobody is left without”.