Chaves vows to spend oil windfall revenues on social programs

Venezuelan President Hugo Chavez has announced that extra income from the country’s oil exports will be allocated for social spending.

Venezuela, South America’s biggest oil producer, has been receiving sharply higher income from its oil exports in recent months. Global prices on Venezuelan oil averaged $107 per barrel last week, while the 2011 state budget was balanced with the $40 per barrel benchmark.

“I have signed a decree that authorizes spending additional revenues from oil sales on the implementation of various social programs for the country’s population,” Chavez, who will seek re-election next year, said on national television on Friday.

The decree primarily hikes the so-called oil windfall tax, introduced by Chavez in 2008, from 60 percent to 95 percent on revenues from oil prices higher than $100 per barrel, giving Venezuela’s socialist leader enough room to conduct populist policies.

Chavez said the new law would allow the government to allocate additional $100 million on public housing projects and raise salaries nationwide.

He also predicted that war in Libya would drive oil prices up in the near future.

Venezuela produces about 3 million barrels of oil per day and sells almost half of it to the United States. U.S. oil futures closed at $112.29 on Thursday.

MEXICO, April 23 (RIA Novosti)


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