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One of the deadliest oil refinery explosions to happen in the last fifteen years took place this past Saturday after midnight in Punto Fijo, Venezuela. After battling a fire which consumed the area for 4 days, firefighters finally extinguished the blaze yesterday at the Amuay refinery.

The explosion, which was caused by a gas leak, killed 48 people and injured over one hundred others near one of the world’s largest refineries run by the government owned Petroleos de Venezuela or PDVSA. The fire started with two fuel tanks and then eventually spread to a third. Many of the victims were National Guard Troops who were stationed at the refinery. The Amuay refinery, which is one of the world’s largest, is part of the Paraguana refinery complex which processes about 900,000 barrels of crude oil a day.

Venezuelan President Hugo Chavez, who is up for re-election on October 7th after 13 years of rule, called for three days of mourning following the blast. But, Chavez’ critics, including his opponent in the upcoming election, Henrique Capriles Radonski have used the blaze as a political platform stating that the refinery blast was due to poor maintenance at the plant. Chavez’ opponents claim that since 2003 there have been 79 other serious accidents reported at the Paraguana refinery complex.

The oil industry was nationalized in Venezuela in the 1970s and large portions of the revenue from the plant go to fund billions of dollars in anti-poverty programs as well as military expenditures and infrastructure projects. The Venezuelan economy is highly dependent on foreign oil sales which account for 95% of Venezuela’s export income. Venezuelan consumers are worried about the cost of gasoline as the Amuay refinery supplies about 60% of Venezuela’s gasoline. The United States is a major buyer of Venezuelan oil. Currently, the price of gas in Venezuela is between 8 to 15 cents a gallon. Yet Venezuela, which has the largest reserve of crude oil in the western hemisphere has recently started importing gasoline.

GUEST: Gregory Wilpert, co-founder of venezuelanalysis.com, author of Changing Venezuela by Taking Power: The History and Policies of the Chávez Government

Visit www.venenezuelanalysis.com for more information.