By Estrella Gutiérrez
CARACAS, Jul 30 1997 (IPS)

Venezuela is living through another week of tension as the planned increase in petrol prices was not accompanied by the prearranged private sector pay increases – blocking the social escape valve planned by the government.

Oil became a volatile issue in Venezuela after a price increase in February 1989 sparked a week of violent protests, leaving 300 people dead – even though at this time the cost of the fuel was still kept low and heavily subsidised.

Thursday’s price hike, will be 27 percent, taking the average cost of a litre of petrol to 14 US cents.

This increase followed on the heels of another which quintupled the cost of fuel in April 1996, when the Rafael Caldera government went back on the neoliberal path following two years of a failed neopopulist experiment, based on controls.

Oil has a direct impact on the prices of all other goods and services in an oil dependent economy, as nearly all passenger and cargo transport is carried out on roads, and the plans to make diesel and gas more widely available are still only in the initial stages.

The new increase is part of an agreement made with the International Monetary Fund (IMF) which was postponed by the government until changes could be made in the labour regime, flexibilising workers rights in return for increases in their deeply depressed pay.

But a large part of the private sector has not carried out the expected revision of its pay scale this month, even though a labour reform approved on June 19 set the minimum salary at around 150 dollars per month.

Meanwhile, the cost of the basic basket of food stands at around 300 dollars, and the basic consumer basket – which includes other basic necessities – at 450.

Also, government bonds aiming to compensate workers for losses incurred in the transferral to a new system for calculating accumulated labour rights will not reach the workers’ pockets until the last quarter of the year either.

Declarations that the country was on the brink of a social explosion and suggestions the government should decree a general pay increase were heard early this week, even in the offices of the traditional parties, while the business sector and unions called for the increase in oil costs to be postponed.

Meanwhile, the government is taking hasty measures to alleviate pressure on the floodgates Caldera has so far managed to keep closed. But breaking point is not far off in a country where poverty affects 80 percent of the population despite a multimillion dollar national income.

The rise in petrol prices was planned for mid-month, but was postponed with questionable technical arguments, while members of the government have spoken of intelligence reports predicting a wave of anarchic protests.

The economic cabinet increased and extended the public transport subsidies to avoid there being sudden increases in urban and suburban ticket prices, when the origninal idea was to gradually reduce these.

But planning minister, Teodoro Petkoff, said the new petrol prices “cannot be turned back” because “they are a bitter medicine which has to be taken.”

He also called on the Chamber of Business People (FEDECAMERAS) who negotiated the ground-breaking labour agreement with the Confederation of Venezuelan Workers (CTV) and the government to consider the situation carefully.

A Fedecamaras assembly here Sunday ended with the election of the most reactionary economic representatives over candidates more committed to the tripartheid agreement as group directors for the next two years.

The new directors said salaries had in fact increased over the last two years as the government imposed the issuing of bonds to keep incomes up, giving them time to reach an agreement eliminating the calculation of labour rights according to the last salary payment.

But the business leaders argue that when the retroactive calculation of accumulated benefits is brought to an end, there will be increases in real income of between 40 and 60 percent anyway.

In Venezuela, the economically active population includes only nine of the 22 million people. Half of those in employment are in the informal sector, which is untouched by any of the tripartheid agreement but still has to suffer the effects of the increased petrol prices.

Out of the 4.5 million formal sector employees, official figures state 12.6 percent are out of work, and 1.5 million are working in public administration.

Workers in private companies have been subject to a wave of dismissals over the last 45 days while the promised wage increases have not happened, according to union claims backed by the government.

Instead, they have seen increases in tariffs and the price of medicimes and other products which the government had kept frozen, and a 50 percent price rise is programmed for the Caracas underground – the only large-scale public transport system under State control.

A planned all-out strike in the anarchic public road transport system of Caracas was called off at the last minute when the news of official subsidies was heard, but the neighbouring industrial city of Maracay – most hard hit by the layoffs – was only partially relieved.

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