Gas likely to stay at pennies per gallon in post-Chavez Venezuela

Although Hugo Chavez has died, Venezuelans are likely to still enjoy gasoline for pennies per gallon – if not for even less.

The people of Venezuela have long been used to low-priced gas that is heavily subsidized by the state, viewing it as a birthright as a citizen of an oil-rich nation. That is not likely to change as Chavez’s chosen successor, vice president Nicolas Maduro, takes the reins before an election to decide the next president, experts say.

At the end of January, the price for one gallon of regular gas was four cents, according to research firm Airinc. Compare that to the January U.S. average of $3.32 per gallon.

Fadel Gheit, a senior energy analyst at Oppenheimer & Co., said Venezuelans may see gas drop even lower as the new leader seeks to win over the support of the country and its people during a complicated transition period.

“This is what endeared Chavez to the people and that is what the vice president will continue to do and do even more of,” he said.

That will increasingly become a burden for Venezuela, which does not have a high refining capacity and therefore imports about a quarter of its refined gasoline from other countries including the U.S., Gheit said.

But don’t expect the penny gas to stop flowing anytime soon.

The last time the government attempted to cut subsidies in 1989, protests broke out and hundreds if not thousands died in riots. That volatile period partly propelled Chavez onto the national stage by setting in motion his first, unsuccessful coup.

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