Hugo's Quagmire

As if Venezuela did not have enough economic problems, President Hugo Chavez says he would be willing to take prisoners from the Guantanamo Bay detention center (GTMO). Hugo said, "We would not have any problem receiving a human being." Like all good dictators, Hugo failed to take into account the feelings or consult the Venezuelan people on his plan to re-settle terrorist thugs in Venezuela. Venezuela is already a Hirabist (Muslim fighting an unsanctioned, evil war or jihad) training ground with Iranians and other Middle East types with boots on the ground there. The Cubans also have a presence in Venezuela.

There are no plans by the U.S. government to send enemy combatants to Venezuela.

Chavez attended the second summit of South American and Arab heads of state in Qatar earlier this week and then traveled to Iran, where he met with his good buddy and fellow anti-Semite, President Mahmoud “Ineedajihad”.

Venezuela has the world's cheapest gasoline with a selling price of 12 cents a gallon but falling oil income and sagging crude output could cause a change in Venezuela’s hefty government gasoline subsidies. The subsidies have guaranteed cheap fuel in Venezuela for decades.

Venezuelan President Hugo Chavez has talked about a price hike, a historically and politically unpopular move. In 1989 Venezuelan leaders increased gasoline prices and more than 300 people died in rioting. Chavez's predecessor, Rafael Caldera, cut subsidies in 1996 and 1997. Chavez took office in 1999 and eliminated the subsidy on cheap leaded fuels. Otherwise, Hugo has left gasoline subsidies unchanged. Chavez said, "one day prices will need to be adjusted, we are practically giving away gasoline."

Since the global economic crash, Venezuela can no longer use billions of dollars from crude exports to subsidize gasoline at home and Venezuela’s economy is now under tremendous strain.

Chavez's government refuses to say how much income it loses each year to gasoline subsidies but a Caracas consulting firm estimated that in 2008 Venezuela $8.8 billion. Oil Minister Rafael Ramirez said only that the price tag is "very high" for keeping gasoline subsidies.

Venezuela’s aging refiner infrastructure is another problem. Refinery costs are rising for Venezuela as output sags at the nation's aging refineries. The world's 11th-biggest oil producer has been forced to import a growing amount of gasoline. Venezuela last year borrowed $3.5 billion from Japanese investors to refurbish some its old refineries. Parts of the El Palito complex closed for ten weeks this spring in hopes of boosting gasoline output. State oil company Petroleos de Venezuela SA wants to build three new refineries by 2012 but falling oil prices put those plans on hold.

Venezuela’s 29.5 percent inflation is Latin America's highest. Raising desperately needed cash by lowering subsidies would only fuel inflation. People in Venezuela jump in their cars for even the smallest errands because gasoline is so cheap.

Another problem, Caracas is now jammed with gas-guzzlers. The traffic gridlock is overwhelming causing a longer commute to work. Car sales soared 68 percent a year between 2003 to 2007 because of the oil boom and access to easy credit. Sales dipped in 2008 when the government restricted imports, but were still triple 2003 levels. Further complicating the situation, Venezuelans also have piled up too much credit card debt.

Some economists in Venezuela say gasoline subsidies benefit the middle and upper class. They buy more cars and drive them more often. Abelardo Daza, an economist in Caracas, said, "We are giving a subsidy to people who don't need it." He believes the government should eliminate subsidies on the high-octane fuel burned by costlier new cars and use the proceeds to upgrade refineries to process more gasoline, more cheaply.

A good dictator has to divert the people’s attention away from their economic problems and blame Venezuela’s problems on its Jewish citizens and tell the people hirabists are coming from GTMO. Keep an eye out for attacks on Venezuela's Jewish citizens if Chavez cuts the gasoline subsidy.