Jorge Giordani is the grey eminence behind the fraud
Mr. Jesus Faria, a pro-government member of the Venezuelan National Assembly, justified the recent approval by the Assembly of the Venezuelan budget for 2013 using an estimated income based in a price of $55 for the barrel of exported oil. He said this low estimate was necessary “given the existing world economic crisis, the worst of the late 100 years”. His statement comes at a time in which the U.S. stock market is at an all-time high and when the worst of the crisis seems to have been left behind. At the very least, the oil prices have not shown any strong signs of declining. Mr. Faria said that such a conservative assumption was “the only way we can plan in a world caught in a terrible crisis”. And he added: “Any additional income derived from the difference between our estimate and the real, higher prices, would be used in the diverse activities of the Venezuelan state”.
This last statement explains the true reasons for the low estimate. Year after year the Venezuelan national budget is based on a clearly unrealistically low estimate of the price of oil. This represents a maneuver to rob Venezuelan states from a share of the true oil income, since the Venezuelan laws stipulates that a certain percentage of the oil income should be distributed to state and municipal governments. As the estimated income is artificially made lower than in reality the money that should be going to the states and municipalities is kept by the executive power, to be distributed at will. This means that pro-opposition governors and mayors will not get the amount of money to which they are entitled by law. The surplus money is centralized in parallel government funds such as FONDEN, Fondo de Desarrollo Economico, managed without transparency or accountability by the President, the Minister of Energy and Petroleum, the Minister of Planning and the Minister of Finance.
This maneuver is clearly fraudulent but it has never been effectively challenged by the Venezuelan opposition. In their discharge we have to say that there is no Venezuelan government institution that would hear their claims with impartiality. The only road open to the opposition would seem to be taking to the streets with massive protests.
But Venezuelan society mimics the seasons. There is no spring, only torrential rains, or extreme drought. Boom or bust cycles. The drought is now getting much longer.
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Gustavo Coronel is a 28 years oil industry veteran, a member of the first board of directors (1975-1979) of Petroleos de Venezuela (PDVSA), author of several books. At the present Coronel is Petroleumworld associate editor and advisor on the opinion and editorial content of the site. All his articles can be read in Gustavo's blog. Las Armas de Coronel . Petroleumworld does not necessarily share these views.
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Petroleumworld News 07/25/2013
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