For the 9 months or so Venezuelans have weathered through hyper inflation, goods shortages, and days-long lines to enter near-empty grocery stores without mass demonstrations.
But last week, according to Bloomberg, President Nicolas Maduro suggested that the country may have to take one measure that has put hundreds of thousands of bodies in the street protesting in the past — raising gas prices.
The oil rich, cash poor country has always given Venezuelans a major break at the pump. Right now a gallon of gas costs $US0.2 cents.
But with oil prices, which make up 95% of Venezuela’s exports and over 60% of the country’s revenue, at historic lows the country is desperate for money. Maduro likely sees raising gas prices as his only choice.
It’s a very dangerous one at that. The last time the government raised gasoline prices was during another time global prices fell dramatically — 1989. Then, as now, the government had taken on a lot of debt and considered raising the price of gas domestically a way to generate revenue.
What followed that decision is known as the Caracazo — a combination of Caracas (the name of Venezuela’s capital) and the suffix “azo”, in Spanish meant to convey a violent smack.
For a week after the government raised prices, chaos rocked Caracas and its surrounding towns. The military had to be deployed to stop the looting, rioting and killing. Hundreds died.
If the people take to the streets again, it would be a repetition of what we saw around this time last year. That’s when opposition leaders — many now jailed — led hundreds of thousand in protests against President Nicolas Maduro. Those demonstrations took months to squash.
Regardless of any public demonstration, dwindling reserves, mounting debt, and waiting creditors mean Venezuela is running out of time. And as yet, the government has provided no long term solutions.
Observers are just waiting for a breaking point.