Venezuela Arrests Seven Suspected of Smuggling Diesel Onboard PDVSA Tanker

PARAGUANA, Venezuela (Reuters) – Venezuelan authorities have arrested seven people for allegedly attempting to smuggle diesel, an industry source and a law enforcement source said last Tuesday, as the government seeks to clamp down on contraband of its highly subsidized fuel.

A tanker owned by state oil company PDVSA loaded 60,000 barrels of diesel fuel at the Cardon refinery despite having authorization to load only 10,000, according to a law enforcement official who asked not to be identified.

Intelligence officers made the discovery in an inspection late last Monday night, according to a PDVSA employee who also asked not to be identified. Authorities believe the suspects intended to resell the fuel abroad, he said.

Neither PDVSA nor the state prosecutor’s office responded to requests for comment.

Enormous subsidies have made Venezuela’s fuel so cheap that an entire tank of gasoline now costs less than the equivalent of $0.01, based on the black market exchange rate. That has drained as much as $12 billion from government coffers in some years.

It has also driven a lucrative business of smuggling fuel to neighboring countries, where the same products are sold for close to international market rates.

The government of President Nicolas Maduro has sought to crack down on smuggling to shore up government coffers amid a global oil market slump.

Authorities in January arrested an oil ministry official charged with overseeing the domestic fuel market for alleged irregularities associated with gasoline distribution. (Reporting by Mircely Guanipa, additional reporting by Alexandra Ulmer, writing by Brian Ellsworth; Editing by Andrew Hay)

(c) Copyright Thomson Reuters 2015.

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