Global Processing

Venezuelan lawmakers approve law allowing state takeover of fuel distribution

September 5, 2008

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, according to the Associated Press. 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. Seven lawmakers belonging to Podemos, the only opposition party represented in the 167-seat assembly, voted against the bill. 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.