The government has met 20 percent of its goal to add 6,000 megawatts to the electricity grid
The electricity crisis hitting Venezuela threatens to reduce further fuel exports, which recorded a year-on-year decrease of 16.3 percent in the second quarter of 2010, thus worsening the negative effects of the economic fall on the oil sector.
The Venezuelan government was forced this year to install dozens of thermal power plants to alleviate a stringent electricity rationing. Fueling these plants is costing several billion dollars in refined products that were intended for export.
The Central Bank of Venezuela acknowledged in a statement that there is "an increasing demand in the domestic market, related to the use of thermal power plants to generate electricity," The document added that Venezuela's economic downturn continued and amounted to 1.9 percent.
Reuters said that the government has met only 20 percent of the plan to install new thermoelectric plants to add 6,000 megawatts to the Venezuelan electricity grid, according to figures released by the Ministry of Electricity. Therefore, domestic consumption of fuel is expected to continue to soar this year.
"Pdvsa acknowledges that its efforts to produce more barrels of oil and gas have not been successful, after oil production recovered following the oil strike in 2002," said research firm Ecoanalítica in a report.
Minister of Energy and Petroleum Rafael Ramírez said earlier this year that the energy crisis hitting Venezuela could be partially solved with thermal power generation. Therefore, 100,000 barrels per day (bpd) of diesel and fuel oil that were intended for export have been allocated to supply the domestic market.
The decline in exports of crude oil and byproducts in the second quarter of the year added to a 3.3 percent drop over the same period last year. In the first quarter of the year, exports declined by 5.9 percent, according to the Central Bank of Venezuela.
Translated by Gerardo Cárdenas
President Nicolás Maduro is not only the heir to the throne, but also to an economic crisis which demanded urgent measures to rectify the course. The crisis showed up in two aspects: a 50% inflation estimate, and shortage of staples ranging between 70% and 98%. These issues might hit the President's poor popularity; considering his feeble electoral victory of 1% over his challenger.