This house would nationalize oil distribution.

OUTLINE

Background:

President Hugo Chávez announced a measure to nationalize wholesale gasoline distribution in Venezuela—despite the lobbying of British Petroleum, Exxon Mobil and Chevron, whose local subsidiaries currently control the business. Under the measure, which received initial approval in the National Assembly Aug. 27, the state company PDVSA will control Venezuela's fuel distribution network, although privately owned gas stations will not be nationalized. Dominated by Chávez allies, the National Assembly is expected to give its final approval to the legislation soon. (http://ww4report.com/node/5962)

Many countries are considering the need to nationalize oil distribution.

Pros

1. To secure fuel supply and to solve oil crisis.

2. Prices could be lower if oil is traded between governments and not through private companies. “Service contracts for supplying oil usually involve private companies. And these companies profit from it. (Carmelito Tatlonghari, a climate change expert and former Energy Program Manager of the United States Agency for International Development (USAID) )

3. Oil giants are a clear and present danger to democracy and need to be put under state control. In an era of oil scarcity we no longer have the luxury of allowing a handful of corporate plutocrats to decide the fate of the global economy. (MIKE WHITNEY)

Cons

1. Legislation could cause fuel shortages, because the government is not prepared to take full control over distribution.

2. We’d be creating a false foundation for the economy. In effect, we’d be subsidizing petroleum use; the artificially low price would encourage more consumption at a time when conservation is necessary. (Jay Bookman)

3. In economic terms, it would send a false price signal. You simply can’t run the world’s biggest economy on heavily subsidized energy. Not for long, anyway. (Jay Bookman)