Venezuelans told to stay home as blackouts continue – Financial Times

The Venezuelan government has told people not to go to work or school on Monday as the worst power outage in the country’s history extended into a fourth day, with thousands of houses still without electricity.

In a televised address, Information Minister Jorge Rodríguez confirmed businesses and schools would remain closed and blamed the outage on US-based saboteurs. He gave no indication when power might be restored.

Caracas and other cities were plunged into darkness for a fourth consecutive night on Sunday. People have complained that food, already scarce, is rotting in their refrigerators. They have also struggled to get cell phone signals or connect to the internet.

On social media, residents in several cities reported long lines at petrol stations.

Juan Guaidó, the opposition leader, told a news conference that 17 people had died due to the power failure, which has affected intensive care units at hospitals. He described the deaths as “murders”.

The government has only acknowledged two deaths and Health Minister Carlos Alvarado said information circulating on social media about the state of the country’s clinics was “false and tendentious”.

Analysts said the outage showed the country was running out of gasoline and diesel supplies, as no back-up thermoelectric plants came on stream as they normally do when there are failures at the problem-plagued Guri hydroelectric dam, which supplies most of Venezuela’s electricity.

“You’re going to start noticing [gasoline and diesel shortages] in the provinces before Caracas, with even more power cuts for example, because electricity generation relies on fuel,” said Asdrúbal Oliveros, head economist at the Caracas consultancy Ecoanalítica. “Then you’re likely to see more scarcity of food due to transport problems.”

The outages are the culmination of an economic unravelling that follows years of hyperinflation and collapsing oil output, capped by tough US energy sanctions.

The January 28 measures ordered that about $11bn of annual Venezuelan oil sales to the US could only take place if the proceeds were diverted to Venezuela’s parallel government led by Mr Guaidó.

Six weeks after the US imposed the ban in a bid to starve Mr Maduro’s government of oil revenues, Caracas has had limited success in skirting the measure by turning to countries such as India and Russia to buy its oil and sell the crucial chemicals needed to keep its energy production going — as the blackout revealed.

Venezuela, which sits on the world’s largest energy reserves, suffered major blackouts in 2008 and 2013, but both were resolved in less than six hours.

Oil output has fallen by two-thirds since 2001 to around 1m barrels a day, a decline that long pre-dates the US sanctions.

“Maduro’s policies bring nothing but darkness,” US secretary of state Mike Pompeo said on social media. “No food. No medicine. Now, no power. Next, no Maduro.”

Elliott Abrams, the US special envoy on Venezuela, said Washington was pressuring India, the second largest cash-paing customer for Venezuelan crude, to stop buying Venezuelan oil.

“We say you should not be helping this regime. You should be on the side of the Venezuelan people,” he told Reuters in an interview.

India has reportedly increased purchases since January 28, when the Trump administration effectively imposed an embargo on US purchases of Venezuelan oil.

According to shipping data from Kpler, a data company, Indian imports have jumped by 100,000 b/d to 400,000 b/d — a large rise but only a partial substitution for US imports, which have dropped to 75,000 b/d in February from 300,000 b/d in January.

“India is definitely playing a key role in mitigating the impact of the sanctions,” said Patricia Ventura, director of IPD Latin America, an energy consultancy. “Most of the Venezuelan exports that would have gone to the US are now going to India.”

The lion share of those exports have gone to Reliance Industries, Ms Ventura said, and some has been sold to Nayara Energy, owned by the Russian state oil company Rosneft, which operates India’s second-largest refiner.

Reliance is also exporting some naphtha to Venezuela, helping it skirt a US ban on its sale. Russia, one of Mr Maduro’s few international allies, is also reportedly shipping naphtha. 

As Indian companies, neither Reliance nor Nayara are subject to the US sanctions enacted on January 28.

Reliance declined to comment on its trade with Venezuela while Nayara said it had not increased its Venezuelan imports in recent weeks. 

Mr Maduro’s relief at finding these alternative outlets could be shortlived. Washington has vowed further action and said it might take measures to dissuade Indian companies from dealing with Caracas.

Residents stand in line at an open bakery during a major blackout in the Chacao neighborhood of Caracas, Venezuela, on Friday © Bloomberg

As the country’s almost sole foreign currency earner, the continued decline of Venezuela’s energy industry will further reduce already-scarce imports, heightening a humanitarian crisis that has increased child mortality by half since 2011 and seen 3.4m refugees flee the country, according to the UN. 

Mr Guaidó has said 300,000 people could die without an influx of emergency aid — such as that currently being stockpiled at the border with Colombia — with US and Latin American help.

On Saturday, there were isolated clashes between the security forces and pro-Guaidó supporters trying to make their way to a march he had called in central Caracas to keep up the pressure on Mr Maduro. Police used pepper spray against some of the demonstrators.

“We’re being repressed by the Bolivarian National Police who, instead of coming out on the side of the people, are supporting this disastrous government,” said one of the protesters, 57-year-old Rosa Cipollone.

She said that while her electricity supply had finally returned late on Friday she now had no running water at home. “We want basic services and to live like normal citizens, with water, medicine and security, and we want to carry on growing as a country,” she said.

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