The Washington Post

Chavez’s Easter gift — to himself

The writer is guest-blogging for The Post.

Smolanksy was saying something other Venezuelans had told me before. That when it comes to making a power play, Chavez is usually smart enough to do it when almost no one is looking: holiday season. So I expected that with Easter around the corner, Chavez would probably be looking to gift himself something special. He didn’t disappoint.

At the end of last week, as Venezuelans prepared to begin their Easter weekends, Chavez announced a decree that allows the government to rake in more oil revenues. The decree offers a sliding scale: When oil prices are between $70 and $90 a barrel, 80 percent of the amount above $70 per barrel will go to the government. When prices are between $90 and $100, the percentage rises to 90 percent. And if prices are above $100 a barrel, then 95 percent flows to the state. That is the relevant figure right now, as the price of Venezuelan oil is hovering at $108. If the price of oil and trading levels remain relatively stable, this surplus tax will generate more than $10 billion in revenue by the year’s end.

Perhaps even more incredible than the sums is where these funds will be directed. This windfall is being siphoned to Fonden, an opaque off-budget fund that operates at Chavez’s personal discretion. In effect, this decree will equal billions more for Chavez’s coffers, months ahead of a presidential election season. And based on the strongman’s own best guess, the price of oil won’t be falling anytime soon. “Prices will keep rising,” Chavez predicted, “in part because of the craziness in Libya.” Chavez may bemoan what is happening to Col. Moammar Gaddafi and other Arab autocrats, but he knows an opportunity when he sees it. And I’m guessing his Easter gift to himself is probably better than anything you got in your basket.


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