cheap petrol...a future problem for health if abused

12.05.06 1.00pm

CARACAS, Venezuela - Taxi driver Jaime Tinoco works the streets of Caracas in a 1976 Chevy Nova that guzzles 72 litres of gas a day. But he doesn't worry about fuel efficiency - filling his tank costs just US$2.30 (NZ$3.65).

While US consumers struggle with soaring energy prices, Venezuela's gas is now the world's cheapest at 12 cents a gallon (3.7 litres) and Washington's regional foe, President Hugo Chavez, vows to maintain subsidies that keep fuel dirt-cheap.

"Those gringos have everything - so why does their gas cost so much?" asked Tinoco between chuckles as he navigated a midday traffic jam. "Don't they have oil reserves?"

Chavez, a self-proclaimed socialist and critic of President Bush, has even begun subsidising fuel for poor US neighbourhoods.

In Venezuela, the world's No. 5 oil exporter, drivers fill their tanks for less than the price of a cheap breakfast, and love to point out that petrol costs less than mineral water.

The nation's petrol is now the world's cheapest, according to an International Monetary Fund report released in April that shows Venezuelan gas prices as about a third of those in oil-producing giant Saudi Arabia.

Shiny SUVs and rusty 1970s-era sedans share the streets of Venezuelan cities as drivers shrug off fuel costs.

Low-priced fuel is considered a birthright in Venezuela, which sells 1.2 million barrels per day of oil to the United States - the world's biggest gas-guzzler.

"Petrol should stay cheap the way it is, that's why we have oil in Venezuela," said Maria Rosa Pinero, 55, a housewife, filling up a Volkswagen Golf at a gas station in eastern Caracas.

Chavez has extended Venezuela's fuel subsidy to poor Americans through a well-publicised jab at the US government that offers 40 per cent discounts on heating oil distributed by Venezuelan-owned refiner Citgo.