Venezuela's oil windfall revenues over USD 32 billion

Despite the setbacks in oil average prices in the second quarter of 2012, billions of dollars have been allocated to the National Development Fund (Fonden) through the Central Bank of Venezuela (BCV), as provided for in the Law on Special Contribution for Windfall and Exorbitant Oil Prices.

By the end of November, the Venezuelan oil basket averaged USD 96.72 per barrel, activating three out of the four levels to calculate the allocations in case of high oil prices, which may amount to some USD 2 billion by November.

Similarly, it is estimated that from January-November some USD 32.6 billion was transferred to Fonden.

The aforementioned law provides that a special aliquot shall be paid to the fund depending on the oil price. Prices have been divided into four levels for such a purpose. If the oil price per barrel is USD 50-70, the aliquot is 20% of the price difference; if the price is USD 70-90, the oil windfall tax will be 80%; if it ranges from USD 90-100, the tax will amount to 90%; and if it is above the USD 100 ceiling, then 95% shall be paid.   

Negative results in the second half

Oil revenues have largely remained unchanged thanks to oil windfall revenues. However, sluggish oil prices in the second half have had an impact on the annual price.

By the end of November, oil price averaged USD 103.95 per barrel, a 2.8% rise with respect to 2011 (101.06 per barrel).

Weak economic growth in the US, discouraging signals about Chinese economic growth, and a market fully stocked have been some of the driving forces accountable for the slowdown in oil prices. Indeed, the Venezuelan oil basket averages USD 99.43 per barrel, 1.6% below the average in 2011. 

etovar@eluniversal.com

Translated by Jhean Cabrera