Energy
The goal that the Venezuelan basket of crude oil and derivatives averages USD 60 in 2009 in order to balance public accounts somehow appears highly unlikely to meet in this fiscal year, when a new election, inflation rates spiraling up and the sacrifices typical of a lean period are expected. 

After the weekly average price exceeded USD 126 per barrel last July, the Venezuelan crude oil has plummeted. This is a matter of concern for financial authorities, but particularly for Venezuelans in general, as they know that a belt-tightening period follows when oil prices starts to plummet.

Between December 15 and 19, the last weekly quote released by the Venezuelan Ministry of Energy and Petroleum, the basket of crude oil averaged USD 32.14 per barrel, almost USD 100 below the peak recorded in mid-July. The 74.5 percent decrease provoked an unbalance in public accounts in the last quarter of the year, as well as a dramatic reduction in oil revenues from state-run oil company Petróleos de Venezuela.

This decline also resulted in removal, as of last November, of the so-called windfall tax, which fed the National Development Fund (Fonden), and suspension as of December of direct money transfers from Pdvsa to Fonden. Both mechanisms were in force as long as the crude oil price exceeded USD 35 per barrel, which was the crude oil price estimated in the country's 2008 budget. However, a preliminary average price of USD 88.74 a barrel last year, it was possible to close 2008 somehow comfortably.

President Hugo Chávez's government has announced new expropriations in 2009, despite the economic crisis. Additionally, yet another vote is expected to be held early this year and there are not public spending cuts on sight. In sum, the domestic finances are set to grow even more dependent on oil revenues, which at the end of 2008 accounted for 93 percent of total Venezuelan exports.

In its year-end message, the Central Bank of Venezuela (BCV) warned that "the planning of the development of the Venezuelan oil industry must take on the challenge caused by the fluctuation of oil prices." "It is vital to set a strict order of priorities to maximize the return on investments, and delaying long-term projects or projects that are not urgent should not cause losses in assets."

Translated by Gerardo Cárdenas

Marianna Párraga
EL UNIVERSAL