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The main factor in price disparities between countries is government policy, according to AirInc, a company that tracks the cost of living in various places around the world. Many European nations tax gasoline heavily, with taxes making up as much as 75 percent of the cost of a gallon of gasoline, said a spokesperson for AirInc.
There goes your theory that it's the oil companies jacking up prices to make huge profits.
To cope with plummeting oil revenue, the source of half the government's spending, Chavez may have to cut domestic handouts and foreign aid. The first items likely to go will be arms purchases from Russia, oil subsidies for Cuba, and job-creating local projects such as bridges and subways, economists say.
``You have a country with an oil boom, that doesn't know how to save, doesn't know how to set up productive industries that generate jobs, and goes into debt,'' said Elsa Cardozo, a professor of political science and international relations at the Universidad Central de Venezuela. ``Then oil prices fall and the party ends.''
Successive governments have unsuccessfully grappled with how to raise prices, sometimes to disastrous effect. It was an unexpected gasoline price increase in 1989 that set off a week of deadly rioting.
The problem is not unique to Venezuela. Last December, Bolivia’s populist leader Evo Morales had to reverse a decree raising gasoline prices after his own leftist base went on a rampage. That same month, Iran posted troops at gasoline stations when President Mahmoud Ahmadinejad slashed the gasoline subsidy, quadrupling prices.
In Venezuela, local media seized on Chavez’s address, which hit a nerve among a population still smarting from last year’s difficult bout of water and power rationing. Additionally, Venezuelans already endure one of the highest inflation rates in the world, with food prices regularly climbing 30% a year, despite having some of the lowest energy costs.
but then again the weekly salary in Venezuela is only about $108
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