Carlos Andrés Pérez's honeymoon lasted only 25 days. On the morning of February 27, at the entrance to the industrial zone of satellite town Guarenas (Valle Verde) protests against the economic measures implemented by his government broke out.

At the same time, students of Trapichito sector demonstrated against increased transport fares. Looting first took place in Comercio Street of Guarenas. The Menca de Leoni sector immediately joined in.

The protests spread through Caracas like a wildfire. The inhabitants of popular areas such as Catia, El Valle-Coche and Antímano took control of the streets. Television channels broadcasted the events live. Initially, the protests had been peaceful, but in light of the inefficiency and inability to control the masses displayed by authorities, confrontations, riots and protests, escalating in violence, broke out. 

The government announced a curfew, deployed military forces in the main cities and crushed protests with excessive violence. In the city of Caracas, the Ávila Plan was set into motion, which allowed the army to police the city and enabled them to use firearms to restrain protests.

The outcome of these demonstrations was an impressive death toll ranging from 300 to 5,000, tremendous material losses and thousands wounded.

The evident consequence of the Caracazo was political instability. The government's program was amended.

Pérez sought a change by opening up the economy through a series of macroeconomic measures fostered by the International Monetary Fund (IMF), labeled "economic package" and aimed at generating substantial changes in the economy of the country.

Those measures included release of lending and borrowing interest rates throughout the financial system up to a cap of approximately 30 percent, a single exchange rate -the preferential exchange rate was eliminated- and liberalization of the prices of all products except 18 items of the basic food basket.

A gradual increase of utility rates such as telephone service, water, electricity and gas, was also foreseen. 

On February 26, the Ministry of Energy and Mining had announced an increase by 30 percent in gasoline prices and higher public transportation rates for urban and interurban destinations also by 30 percent, valid for a three-month period. After that, prices could be raised up to 100 percent.

The Inter-American Human Rights Court condemned the actions of the government. The state committed to provide compensation to the victims, something that was partially done in 2004.