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For Venezuelans, the Fall in Oil Prices Is Personal

When writing about the world’s energy markets, the temptation is to focus on the shifting fortunes of petro-states and giant multinational corporations. And sure, these are important stories. But in the process it’s all too easy to overlook how the plummeting oil price is affecting the livelihoods of ordinary people. Take Venezuelans. They welcomed the ...

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When writing about the world’s energy markets, the temptation is to focus on the shifting fortunes of petro-states and giant multinational corporations. And sure, these are important stories. But in the process it’s all too easy to overlook how the plummeting oil price is affecting the livelihoods of ordinary people.

Take Venezuelans. They welcomed the New Year in a sour mood. And their depression has everything to do with the crash in the price of crude.

Thanks to a combination of lower oil prices and an economic policy based on rigid price and currency controls, the scarcity of basic staples such as toilet paper, beef, chicken, and cooking oil has never been worse. People spend hours in line hoping to purchase essential items, but they’re rarely successful.

Even though final 2014 figures on the Venezuelan economy have yet to be made public, we do know a few things about the shape it’s in. Inflation closed at around 70 percent for the year. The country is in recession: GDP is expected to have dropped by around 4 percent once the numbers are in. The price of oil, which accounts for about 96 percent of the country’s exports, has dropped by about 60 percent since June.

But let’s put the headline numbers aside for a moment. How bad is it for regular folks?

Elda is in her late 50s. She lives in the western city of Maracaibo, where she works as a housekeeper. She earns a bit more than the minimum wage, which is only enough to cover basic food requirements for about half of her family. Her employer provides her with meals and supplies her with basic staples, such as toilet paper and sugar, purchased on the black market.

This makes an enormous difference for Elda, since she can’t afford the black market on her wages. She never made it past the third grade, and lives in a two-room house with dirt floors. Thanks to generous government programs, her house has a few appliances: a refrigerator and an oven. Electricity is intermittent, and she can only use the oven when she manages to find natural gas containers, a difficult proposition in Venezuela these days.

While her other children work in makeshift jobs, two of her younger daughters are both unemployed and out of school. Their only “job” is to spend the day standing in line, waiting to see what they can purchase at government-controlled prices. Most days it’s not much. (The photo above shows people standing in line outside a supermarket in Caracas on Jan. 8.)

Susana, 48, is a manicurist and hair stylist by trade. She lives in a small, run-down apartment she purchased years ago, thanks to a government subsidy.

Lately she’s been finding it difficult to keep her customers satisfied. Nail polish remover is difficult to find, and when she finds it, it’s only at black market prices. Hair dyes are practically nonexistent. She wishes she could hide her gray hair but can’t afford to do so any more.

Susana’s husband, 49, is a washing machine repairman. He’s also finding his job challenging, as spare parts have now become scarce parts. Because of this, both of their incomes have decreased in recent months. One of the things Susana and her husband have cut back on is therapy for their autistic child.

Luis, 43, is a divorced father of two. After getting his economics degree and trying out different ventures, he opened a small seafood restaurant a year ago.

He tells me that fish is one of the most difficult things to come by, since most of the catch is taken across the border to Colombia, where it fetches market prices. Seafood is being sold at black market prices, so high that it’s disappeared from his menu. “Ground beef,” he tells me, “is now costing me twice as much as what I paid three weeks ago.”

One of the more challenging aspects is the need to raise his prices every few days. “My menus now come with stickers. Every five days or so, I jack up the prices by replacing the stickers. It’s an impossible environment in which to do business.”

Elda, Susana, and Luis come from different social classes, but there is one worry that unites them: crime. Elda has been held up at gunpoint in public transportation several times, as have Susana’s children. Luis has had his cell phone stolen at gunpoint, and thieves have repeatedly tried to break into his restaurant. He even keeps the toilet paper in the public restroom under lock and key, because customers have stolen it in the past.

The Venezuelan crisis affects everyone, but to varying degrees. There are still plenty of wealthy people in the country, many of them connected to the government in one way or another. Some make enormous sums by playing the system, whether it be by taking advantage of the black market or exploiting other arbitrage opportunities.

But these are the exceptions. As the country’s economy goes from bad to worse, writers about Venezuela are running out of modifiers to describe the situation: imploding, reeling, collapsing.

Perhaps it’s time we incorporate a few more personal adjectives: despairing, soul-crushing, exasperating. That would probably better reflect the mood inside the country.

You can follow Juan Nagel @juannagel.

JUAN BARRETO/AFP/Getty Images

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