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Published On: Tue, Jan 3rd, 2017

Venezuela’s PDVSA Accepts Colombian Currency Along Colombian – Venezuelan Border

nsnbc : Venezuela’s State oil company PDVSA has begun charging Colombian currency for sales of gas along the Colombian – Venezuelan border. The measure comes amidst Venezuela’s skyrocketing inflation delays in the issuance of new Bs100 bills, and tense relations between the two neighboring countries.

Venezuelans cross over to Colombia to purchase food and other basic goods in recent border opening (El Heraldo).

Venezuelans cross over to Colombia to purchase food and other basic goods. (El Heraldo).

PDVSA, on Monday, began selling gasoline along the border to Colombia in Colombian currency, charging 1200 Colombian pesos per liter. The measure affects Ureña in Táchira and Paraguachó in Zulia as part of what PDVSA touts as a pilot venture.

The move was announced by Venezuelan President Nicolas Maduro on December 29. Maduro, referring to border traders, especially on the Colombian side, would tout the measure as a “strike against the mafias”. He also noted that the initiative aimed at a “healthier border”.

Tensions between Venezuela and Colombia rose in December, as Venezuela began to recall Bs100 bank notes and set narrow timelines for exchanging them to new ones.

The administration of Colombian President Juan Manuel Santos intervened, saying that the Venezuelan measure affected border traders who were so kind as to accept Venezuelan currency more than any “mafias”. The situation was eventually deescalated after a telephone conversation between the two presidents.

However, the “pilot” aimed at a more free flow of both currencies is but one step in the de-escalation. Venezuela consistently accuses Colombia of supporting right-wing paramilitaries and their cross-border operations.

Colombia is more laid back with regard to accusations against Venezuela, but analysts with even limited knowledge to the region know that Venezuela also facilitated FARC operations, still facilitates ELN operations, and functioned as one of the main transit countries for the FARC-EP’s and ELN’s cocaine export. Adding to tensions is hyperinflation in Venezuela, as well as an ailing Colombian economy.

A/N & F/AK – nsnbc 03.01.2016

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