Venezuela has decided to increase fuel prices for the first time in 20 years, although President Nicolas Maduro claims it will still be the cheapest in the world.
Nicolas Maduro said pump prices of premium fuel would rise from the equivalent of $0.01 a liter to about $0.60.
The cost of lower grade petrol would rise to about $0.10 a liter.
Nicolas Maduro unveiled a series measures to help ease Venezuela’s economic crisis, including devaluing the currency.
“Venezuela has the cheapest gasoline in the world,” Nicolas Maduro said in a TV address.
“The cost is almost nothing.”
However, other countries, including Saudi Arabia also have extremely cheap, subsidized petrol prices.
Nicolas Maduro said the price rise was “a necessary measure, a necessary action to balance things, I take responsibility for it.”
Food and petrol price increases in 1989 sparked nationwide protests that resulted in scores of deaths, unrest that is considered to have paved the way for the late President Hugo Chavez’s rise to power.
Venezuela’s economy has been pushed to the brink by the collapse in the oil price, which accounts for about 95% of the country’s export revenues.
The economy shrank 10% in 2015, amid rampant inflation and shortages of some basic products,
According to the Bloomberg news agency, the state oil company Petroleos de Venezuela incurred $15.2 billion in costs in 2013 to maintain Venezuela’s fuel subsidy.
Nicolas Maduro also announced that the government would “simplify” the complex exchange rate from February 18, easing the protected official rate for food and medicine imports which will now operate alongside a parallel “floating” rate.
Investors have become increasingly concerned about Venezuela’s potential default on its huge debts.