The economics that fuel Venezuela’s smugglers

Smugglers filling up gasoline tanks on the Colombian side of the border with Venezuela in 2009. / CARLOS GARCÍA RAWLINS (REUTERS)

Residents of the city of Maracaibo are selling subsidized gasoline in Colombia to make a living

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Alfredo Meza Maracaibo

The 1979 Impala – a heap of metal with an eight-cylinder engine and long hood – that Alexis is driving from Maracaibo is not the only vehicle traveling up and down Troncal del Caribe, the two-lane highway that connects the capital of Zulia state (known for its oil reserves) in western Venezuela with Maicao in Colombia. Trying to count the number of cars on the road along this stretch of the Venezuelan Caribbean coast is useless. Impalas and similar models such as the Fairlane 500, LTD, and Caprice Classic that were popular in this country in the 1970s and 1980s come and go. And as well as the cars on the highway are those waiting to cross the road from side streets, the ones parked by dilapidated homes, and those that have been scorched by the sun while sat between the salt mines and thick bushes.

The drivers take travelers from one city to another. They also work as bachaqueros, smugglers who carry and resell subsidized goods from Venezuela in other countries at market prices. They take 105-liter tanks and drive across the border where, on average, they sell three “points” – each point is equivalent to 23 liters.

Alexis is happy. Here the law of supply and demand rules, and the price of a cylinder has doubled since President Nicolás Maduro tightened security at the border in early August.

In Maicao, the pimpineros, illegal fuel vendors who sell their product in containers of various sizes, stop downtown, at the corners of 12th Street and 13th Street. Alexis only has to lower the window of the Impala to listen to the offers. “Twenty-five, 25 for one point.” About 100 meters ahead, another says “26.”

Three out of four residents in Mara live at or below the poverty line

But Alexis does not want to sell for less than 28,000 pesos, so says: “29.” After 15 minutes, he accepts 84,000 Colombian pesos for three gas cylinders. He has sold each 23 liter-cylinder at 28,000 pesos, or 1,272 bolivars, at the black market rate applied at the border. He has earned 570 times the investment he made in Venezuela. Those same 23 liters cost him 2.23 bolivars in Maracaibo. The state has maintained the price of gasoline at 0.097 bolivars a liter (€0.01 at the official exchange rate) for the last 18 years.

The Impala’s tank is almost empty so Alexis will have to refill when he gets to the other side of the border. He travels back and forth, as much as the heavy traffic allows, until the border closes.

Until two years ago, Alexis had worked as a security guard on an important property. But he sees his new job – an activity expressly forbidden by law since the state banned the sale of government-subsidized goods abroad last week – as a good way to channel his desire to work for himself.

Smuggling is new to Maracaibo residents. The indigenous Wayuu people have always carried food and other products to and from Colombia. But according to Gilberto González Millán, president of Zulia’s trade business leaders association, inflation in Venezuela has not only led to job losses but also eliminated the incentive to depend on an employer. “Bachaqueros have discovered that buying subsidized foodstuffs and selling gasoline is much more lucrative than working an eight-hour day and getting paid twice a month.”

Then there are the peculiarities of the border region. Two years ago, the government limited the sale of gasoline to 42 liters per vehicle. Though the law has met with much resistance in the border states, some have taken advantage and the smuggling business has flourished, providing a way to make a living for the majority of the population.

‘Bachaqueo’ is now forbidden by law after the state banned the sale of government-subsidized goods abroad last week

The Troncal del Caribe highway crosses two of the poorest municipalities in Venezuela. According to the national statistics bureau, three out of four residents in Mara live at or below the poverty line. In Guajira, 70.4 percent of the people are poor and 60 percent of the homes lack adequate amenities.

Troncal del Caribe can be as desolate as the road in Cormac McCarthy’s novel of the same name. Maicao has about 3,000 registered businesses and 98 percent of them are trade enterprises.

Donkeys pull a cart over dirt roads to carry two tanks of water. No one knows when this town will get running water. A Maicao businessman said the poor can only survive in a such a rough place by smuggling. That is exactly what Hermágoras Pérez does. On the way back to Maracaibo, Alexis and his Impala stop to get gas from him.

Hermágoras sells gasoline in five-liter containers at 70 bolivars a bottle. He supports his wife, five kids, a granddaughter and a son-in-law. “What can you do when there is no work here? If they deny us this opportunity, we will starve to death,” he says in his home, which is located on the side of the highway.

Two of his sons are working behind some zinc walls in a corner of the yard. They are organizing a shipment of fuel. An old 1973 Chevrolet Biscayne carrying 100 liters of gasoline is parked next to the Impala. They have not been able to sell the fuel because the car broke down a few days ago. The vehicle depends on other old cars that pass down the highway to make sales.

Alexis thinks that he can get to Maracaibo on five liters. But the heavy traffic messes up his plans. Twenty kilometers away from the second most important city in Venezuela, the red Impala starts to lose speed. Alexis expertly parks the car in a clearing. After checking the tank, he delivers the final sentence: he is out of gas.