Venezuelan President Hugo Chavez last week said the Organization of Petroleum Exporting Countries should devise a plan to sell oil to poor countries at prices lower than those paid by wealthy nations.
“I would sell oil to a rich country at $100[/bbl] and to a poor country perhaps at $20[/bbl],” Chavez said in an interview on state television. “That breaks with the schemes of capitalism....OPEC could do it, although there are hard positions on it, but I’m taking the issue to discuss it.”
Chavez said, “How are you going to sell oil to Haiti, one of the poorest countries in the world, at $100[/bbl], the same price that you sell it to the United States? It’s not right ethically.”
He added, “We’re going to try to obtain the support, if not of all OPEC countries, of some of them, and of other major producers to design a formula thinking of the coming years.”
Con su permiso?
Chavez said Venezuela is setting an example by selling oil under preferential credit terms to Latin American and Caribbean countries. As we have noted, he also is selling oil at low rates to western nations like the UK (OGJ, Feb. 26, 2007, p. 34).
But as we also have noted, Chavez is providing price breaks at the expense of his own people, who have no choice in his pricing schemes.
“Con su permiso?” is how the question is phrased in Spanish, the question he could easily ask his own people about the price their oil is sold at. But we have yet to hear Chavez utter it to the street urchins of Caracas.
As one report recently noted, “Food shortages are plaguing the country at the same time that oil revenues are driving a spending splurge on imported luxury goods.” That’s what Rory Carroll of Britain’s Guardian newspaper reports these days.
Food for the barrios?
Milk has all but vanished from shops, Carroll says, while distraught mothers ask how they are supposed to feed their infants. Many cafes and restaurants serve only black coffee.
Families say eggs and sugar are also a memory. “The last time I had them was September,” said Marisol Perez, 51, a housewife in Petare, a sprawling barrio in eastern Caracas. Barrio? That’s another word for slums.
Up to a quarter of staple food supplies have been disrupted, according to Datanalisis, a public opinion and economic research group. To Chavez’s detractors the scarcity shows that his revolutionary “21st century socialism” is driving South America’s oil power towards ruin.
We are certain the OPEC members will give Chavez’s proposals for cheaper oil a polite hearing. In our experience OPEC members are very polite.
They will probably not tell Chavez to shut up, as did Spain’s King Juan Carlos recently. But they will doubtless not care to take his ideas much beyond the listening stage.
