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realclearworld

Reports from Cuba’s Venezuela: There is too much money to be made in the Bolivarian Revolution I: The Gasoline Racket

Via The Devil's Excrement:

There Is Too Much Money To Be Made In The Bolivarian Revolution I: The Gasoline Racket.

phoca_thumb_l_img00467-20130119-0827 2

“You will never win this war when there is so much money to be made. Never”

Jhon Popeye Velasquez alias “Marino” in an interview before he was released.

To those that watched Escobar, El Patron del Mal, the character Marino is one of the worst guys in the book and series. It turns out that this week he was freed from jail after serving twenty eyars and has been in the press quite a bit. The sentence above hit me, because that is one of the things that I fear may happen in Venezuela: there is so much money to be made, that those trying to change the Government may never be able to. While “Marino” was referring to the drug war, I am referring to all of the corrupt businesses allowed and nurtured by the revolution. Everything in the rveolution has been turned into some form of business or arbitrage. From drugs, to Cadivi, to Fonden, to gas. Thus, do you really think those in control are going to give up these rackets so easily?

I don’t.

The basic question I want to answer is: How much money or profit are we talking about?

In this post I make a very rough estimate of one the biggest businesses (Billion dollar plus) where the boliburgoise and Government officials, civilians or not,  have gotten rich, filthy rich. I make many assumptions, attempting in the best case to be under the correct amount, rather than over. I will try to make a series out of this. Today, gasoline

1) The gasoline racket.

When did it become such a big business to take gasoline out of Venezuela? Since Chavez became President in 1998, the price has been frozen. When he got to power, a liter of gas was about Bs. 90 (0.09 of today’s Bolivars) and a dollar was about Bs. 600 (Bs. 0.6 of Bolivares Fuerte). Even at that level it was a good deal to send gas to Colombia. But it did not become such an organized activity until the difference was so large, that the cost of gas was irrelevant. Let’s say a factor of 50, that is, when the parallel market rate became Bs. 5. I am going to assume that this is when the racket began to become massive. We are talking around 2007. And I assume it reached the current massification when the factor became 100. This happened in 2012.

Continue reading HERE.

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