Venezuela state oil company to turn over more dollars to Central Bank to fight shortages

Venezuela's government announced plans Monday to have the state oil company turn over more of its earnings in dollars to the Central Bank, seeking to confront shortages of some foods and other products that have worsened due to a lack of dollars provided to importers at official rates.

Oil Minister Rafael Ramirez announced the change at a news conference, saying state-run Petroleos de Venezuela SA is to increase by nearly $2.5 billion the amount of dollars it turns over to the Central Bank this year.

Ramirez said that President Hugo Chavez had supported changing the law and that is to be approved by the National Assembly, where pro-Chavez lawmakers hold the majority.

Sporadic shortages of some foods such as cooking oil and chicken have worsened recently while the government has been making available fewer dollars at the fixed exchange rate. Since November, the government has scaled back the amount of dollars it has been providing through its currency agency to businesses and individuals.

The situation has generated growing rumors of a possible devaluation while pushing down the bolivar in street-level black market trading to less than one quarter of the official rate of 4.30 bolivars to the dollar.

Some business leaders have said that the insufficient amounts of dollars provided to businesses has led to fewer imports and worsened shortages of some foods and other products in stores.

Ramirez said the government has sufficient funds to meet the economy's needs for dollars. Oil is the lifeblood of Venezuela, accounting for most of its export earnings and helping to bankroll an economy heavily reliant on imports.

Last year, the state oil company sold to the Central Bank $46 billion, Ramirez said. This year, he said, if oil prices keep to the range where they have been, the oil company should provide about $49 billion to the Central Bank.

Ramirez spoke in front of a photo of Chavez saluting, and showed journalists a document with the president's signature.

The oil minister was among several officials who visited the ailing president last week in Cuba, where he has been recovering since undergoing a Dec. 11 cancer surgery.

Vice President Nicolas Maduro had announced on Saturday that during their meeting, Chavez made decisions on certain economic matters and had signed various documents. One was the decision announced by Ramirez on Monday.