(Adds analysts comment, details on tax revenues)
CARACAS Oct 24 The price of Venezuelan oil
fell more than 10 percent this week, boosting financial
pressure on the government of leftist President Hugo Chavez
whose popularity depends on oil-financed social programs.
Analysts said Chavez could survive a large oil price drop
in the short term due to abundant government funds, but the
socialist stalwart could face a larger-than-expected 2009
fiscal deficit amid the global financial crisis.
The average price for Venezuela's oil basket dropped $6.91,
to $61.09 per barrel, for the week ending Oct. 24, the OPEC
nation's energy ministry said on Friday, amid a massive tumble
of energy prices across the globe.
Ratings agency S&P on Friday said it maintained a stable
outlook for Venezuela and expected the current account to
remain in surplus until at least 2011, though warned it could
have to devalue its currency in 2009.
The price drop could eliminate some $9 billion in revenues
that the government expected to receive through a windfall oil
tax created earlier this year.
The tax went into effect when world oil prices were at $70
per barrel -- $5 above the price U.S light crude was fetching
in Friday afternoon trading.
The oil price was closing in on the 2009 government budget
price target of $60 per barrel, meaning a further slump could
boost the budget shortfall an expected $5.6 billion.
Venezuelan lawmakers usually create an artificially low
target for the oil price, allowing the government to spend the
money with fewer strings attached later.
If oil prices stay at the current level, Chavez will have
to reduce discretionary spending significantly next year.
"This means that without that extra income from the oil
industry, the administration ... will have to choose between
social programs rather than financing all of them," said David
Duarte of the online financial analysis group 4CAST.
(Reporting by Fabian Andres Cambero; Writing by Brian
Ellsworth; Editing by Christian Wiessner)