Even socialist demagogues can't escape opportunity costs.In 2010, Pdvsa [Venezuela's state oil company] sold its Ruhr Oel assets to Russian company Rosneft for $1.6 billion (€1.2 billion). Citgo, which operates in Louisiana, Texas and Illinois, can produce 750,000 barrels of refined oil a day. The network controls 6,000 gas stations in 27 US states, mostly on the east coast. “Citgo should not sell for less than $10 billion,” Chávez said in October 2010. “If we sold it and put the money in some banking accounts with interest, there would be dividend benefits of I don’t know how much each year.”
Eventually, the socialists die and leave their heirs no money to steal from other people.While the government weighed its options to sell, Chávez used Citgo as a political tool. He and Joe Kennedy III’s NGO, Citizens Energy, created a program to distribute gas and heating oil to low-income American families on the east coast of the United States. The government said it donated $500 million in fuel between 2005 and 2013. But now, Chávez is dead and his successors are in bankruptcy.
And, when that is gone?If gas prices on the domestic market – which have not changed since 1996 – went up to meet production costs, Pdvsa would save $13 billion in subsidies. Citgo’s sale will bring in a similar amount.