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May 14, 2013

Venezuela Becomes Net Gasoline Importer in 2012

by Reuters

Venezuela in 2012 became a net importer of gasoline as a result of escalating problems at its refineries and increasing demand for fuel in its internal market, joining a growing list of countries that struggle with fuel supplies despite ample oil reserves.
 
The OPEC nation exported 30,000 barrels per day (bpd) of gasoline and naphtha last year, according to state oil company PDVSA's annual report. But it imported an average of 66,300 bpd of the same fuels from the United States alone, according to U.S. Energy Department data.
 
Fuel imports jumped following an August explosion and fire at the country's largest refinery, Amuay, that killed more than 40 people and caused extensive damage to its storage facilities.
 
“Between the days of the incident and the resumption of operations, PDVSA imported blending components worth a total of $1.572 billion,'' the company said in its financial results.
 
The report does not provide import volumes. PDVSA did not respond to requests for comment.
 
Oil Minister Rafael Ramirez has consistently denied that the country is importing finished gasoline, insisting the purchases have been limited to blending components.
 
But data provided by the U.S. Energy Information Administration, or EIA, shows most of the imports between September and January from the United States were finished gasoline and diesel.
 
Crude exporters in the region including Mexico and Ecuador depend on energy markets to meet fuel needs because of insufficient investment in refining.
 
Venezuelans enjoy a massive fuel subsidy that makes gasoline the cheapest in the world, letting drivers fill their tanks for less than the equivalent of a dollar. That spurs fuel smuggling to neighboring Colombia and Brazil.
 
In addition, the government is installing diesel generators to reduce dependence on hydroelectric power, which has increased demand for diesel.
 
The Amuay fire and explosion caused extensive damage to one of the 635,000 bpd facility's distillation units and forced a temporary halt to the entire facility. The refinery resumed full operations in April.
 
Losses at PDVSA's domestic refining and sales division more than tripled to $8.4 billion in 2012 from $2.3 billion the previous year as a result of these factors.
 
Between September and January, PDVSA imported an average of 148,000 bpd, most of which was gasoline, according to the EIA.
 
Although import volumes fell in February, PDVSA continues seeking to acquire fuel in international markets, according to traders. The company's 2013 targets show crude and fuel exports dropping by 8 percent this year.
 
PDVSA's earnings statement says purchases of crude and fuel rose 47 percent to reach $26.3 billion in 2012, while purchases from third parties by foreign subsidiaries such as U.S.-based refiner Citgo dropped 3.4 percent.
 
The tight supplies of fuels were reflected in a sharp decline in sales to Citgo, which has traditionally received finished fuel from PDVSA through supply contracts.
 
Fuel sales to Citgo reached only $302 million last year compared with $4.2 billion the year before.