Intellichem: Venezuela economy improving, not oil

southflorida.bizjournals.com Robin Londner  

Coral Gables-based consultant firm Intellichem said Venezuelan workers are gradually going back to their jobs as of this month, but it also said oil workers have decided to continue their strike to press for early election.

The continuing labor problems in Venezuela's oil industry concerns South Florida because the majority of the petroleum that arrives at Port Everglades is from refineries in Venezuela, the Gulf of Mexico, Aruba, the Bahamas and Mexico. More than 1,000 petroleum tanker-trucks leave the port every day.

The Broward County port is the second-largest East Coast non-refinery center for petroleum products. In fiscal year 2001, the port processed 117.9 million barrels of fuel, or 16.77 million tons.

Problems in Venezuela and other countries have also hurt the Port of Miami. When that port released its container totals for fiscal year 2002 in November, the struggling economies of Venezuela, Argentina, Brazil, Uruguay and Chile pulled down overall tonnage from South America by 12 percent.

Fuel costs have also impacted the costs consumers pay for fuel. For businesses such as trucking and aviation that depend on fuel prices, problems in Venezuela continue to drive up fuel prices. Earlier this month, travel organization AAA blamed the continuing loss of oil and gasoline imports from Venezuela for lowering fuel inventories, but also said nothing fully justifies the dramatic increase in gasoline prices consumer are seeing across the United States.

Up about 13 cents from the middle of January, as of Feb. 11, AAA put gas prices at $1.60 a gallon. The price was the highest since June 2001 when the average price was $1.66 and the highest February price ever recorded by AAA.

Florida Attorney General Charlie Crist has indicated he thinks those prices are too high. Last week, he sent a letter asking the Federal Trade Commission to see if gasoline sellers are colluding to increase prices in the state.

"The recent spike in fuel prices is startling," Crist said.

Also last week, Juno Beach-based FPL Group (NYSE: FPL) made it clear it wants the state to help it with fuel costs. The utility cited U.S. and world events as driving up prices its electric subsidiary, Florida Power & Light Co., must pay for fuel. Because of these increases, FPL Group asked the Florida Public Service Commission to approve a 6.2 percent increase on residential bills, a 7.3 percent increase on commercial bills and an 11.6 percent increase on industrial bills, all beginning in April.

FPL Group said the average price it expects to pay for a barrel of oil to generate electricity is 8 percent more this year than last year. FPL Group said it expects to spend nearly $3 billion for fuel in 2003, but did not give a figure from last year for comparison.

"What is happening to fuel prices from events around the country and around the world has been a tremendous frustration to our customers and all of us at FPL who have worked so hard to keep our operating costs down in order to keep bills low," said Paul Evanson, FPL president.