CARACAS: Venezuela will raise gasoline prices, the country's oil minister told reporters on Tuesday, repeating a government promise to increase the world's lowest fuel prices for the first time in two decades.
Oil Minister Rafael Ramirez did not give a timeline for the increase, but said it would not be comparable to international prices.
According to government figures, cheap fuel costs the gasoline subsidiary of state-run oil company PDVSA $12.5 billion in losses annually.
Efforts to raise the price of fuel in Venezuela, which has the highest inflation in the Americas, reaching 60.9 percent year-on-year in May, have been delayed several times.
"We will not put on the international price because that's not the idea, but it will be a price which is reasonable," said Ramirez, who was attending a celebration of the centenary of the discovery of oil in the Caribbean country.
"There has to be a discussion (about the price rise). It is cheaper to fill a tank than to buy a cigarette," said the minister, who is also president of PDVSA.
A full tank of 91 octane gas for a small vehicle costs about 38 cents in Venezuela, four times less than a medium-sized bottle of water.
A liter of 95 octane gas sets buyers back only 0.097 bolivares ($0.015).
It costs PDVSA 28 times more to produce gasoline than its sales price. For diesel, the production costs are 50 times what consumers pay at the gas station.
"We are the country with highest gas consumption per capita and we have the lowest gas prices in the world. It can't be justified," said Ramirez.
Raising fuel prices is a sensitive subject for Venezuela, which has the largest crude reserves in the world.
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