Venezuela to takeover fuel distribution

Lawmakers loyal to President Hugo Chavez gave final approval on Thursday to a bill allowing the Venezuelan government to seize total control of the nation's fuel distribution. Under the law, distributors including subsidiaries of British Petroleum, Exxon Mobil Corp. and Chevron Corp., will have 60 days to negotiate the sale of their businesses to the government or face expropriation. The National Assembly, which is controlled by Chavez allies, approved the legislation with a near unanimous vote. The law permits Venezuela's state-run oil company, Petroleos de Venezuela SA, or PDVSA, to take over all wholesale fuel distribution, but allows 67 percent of the country's gas stations to be privately owned. It also forces wholesale distributors to sell storage tanks and gasoline pumps to PDVSA. Under Chavez, the socialist government has nationalized Venezuela's largest telephone, electricity, steel and cement companies and has assumed majority control over four major oil projects. Critics say the move could cause shortages at gas stations because the government is not prepared to take full control over distribution. But Chavez has defended the law, accusing operators of making an easy buck at the country's expense. Angel Rodriguez, a pro-Chavez lawmaker, said PDVSA plans to spend US$325 million to acquire 1,200 fuel transport trucks currently owned by private wholesalers. Local wholesalers Trebol and Llano Petrol together control 26 percent of the market. BP controls 7 percent while Exxon and Chevron control 5 percent and 3 percent, respectively. The remaining 10 percent is controlled by smaller Venezuelan companies.