BOGOTA, Aug. 12 (UPI) -- Colombia has rushed fuel supplies to areas on the Venezuelan border facing fuel shortages due to a Venezuelan energy squeeze, ordered by Caracas to punish Bogota for its military cooperation with the United States.
Venezuelan President Hugo Chavez ordered suspension of a Venezuelan subsidy that allowed Colombians to buy fuel at half the normal price. He said he could not allow Colombian President Alvaro Uribe any concessions while Uribe favored a U.S. military presence in the country.
Uribe says the additional U.S. troops provided under a new accord are needed to give momentum to a joint Colombian-U.S. operation from the air and ground to fight drug traffickers targeting North America.
The military campaign suffered a setback when Ecuador asked the United States to cease anti-narcotic interdiction flights and other operations from its territory.
Colombian Minister of Mines Hernan Martinez said the government would send at least 2 million gallons of gasoline to stock up on supplies in the border region, which until Sunday bought Venezuelan fuel at subsidized prices.
He said Colombia would also explore other avenues for fuel imports to replace Venezuelan supplies, now set to be available at double the price because of the withdrawal of the subsidies.
Colombia has also set in motion contingency plans to increase domestic production at the refineries in Cartagena and Barrancabermeja.
Martinez urged consumers to be patient and warned consumers they faced higher prices.
Industry sources said Colombia would also need to watch for additional fuel smuggling from Venezuela, where fuel retails at some of the lowest prices in the world.
For some time now, cheap fuel has been a temptation for smugglers to take truckloads across Venezuela's borders for profit. Venezuela claims it loses about $1 billion a year in illegal trafficking in fuel across its borders.
It was not clear if the suspension of Venezuelan subsidies for fuel sold to Colombia also spells the end of a 2008 agreement that governed those sales. Under that accord, Venezuela has been selling 50,000 to 200,000 barrels of subsidized gasoline monthly to Colombia.
A key reason for the subsidy deal was Venezuelan worries over fuel smuggling. Caracas hoped the cheap fuel deal with Colombia would eliminate fuel smugglers, some of them said to be powerful cartels, dangerous and ruthless like organized drug smuggling groups.
Analysts said that despite the measure Venezuela could lose out if it prolonged the ban on subsidized fuel for Colombia. Its retaliatory measures against Colombia have won Venezuela new support among Latin American countries eager for its business. But Colombia is a large supplier of food, textiles and other consumer items to the country, and recent measures by Caracas may be short-lived, analysts said. Trade between the two countries reached $7 billion in 2008, and Venezuelan consumers are used to Colombian produce and consumer items.
Colombia's government so far has avoided tit-for-tat measures against Venezuela. But analysts said Colombia could, if pushed, hit back by cutting back on its supplies of electricity and gas to Venezuela.
