CARACAS: Venezuela’s government slashed the price of eggs by 65 percent as it uses new powers to tackle the fastest inflation in the world. Shoppers in downtown Caracas responded by lining up to buy them.
The maximum retail price for a carton of 30 eggs was reduced to 420 bolivars from an average of 1,200 bolivars, Vice President Jorge Arreaza said Wednesday on state television. That’s about 50 U.S. cents at the current black market exchange rate of 848 bolivars per dollar, or $2.10 at the weakest legal exchange rate of 200 bolivars per dollar.
“Now, with the fair price, no one in this country can sell a carton of 30 eggs for more than 420 bolivars,” Arreaza said. “They can sell them for less than that, but the maximum fair price is unalterable.”
Venezuela on Tuesday published new regulations in the official gazette that give the government widespread authority to set prices and maximum profit margins for all products. Those found guilty of “speculation” will face eight to 10 years in prison, according to the law. Record inflation, the worst economic contraction in the world this year and ongoing shortages of food and medicine are undercutting support for both President Nicolas Maduro and his party ahead of national assembly elections on Dec. 6.
Inflation in Venezuela will average 159 percent in 2015 and accelerate to 204 percent next year, the International Monetary Fund said last month.
Shoppers outside a store in the Guaicaipuro market in downtown Caracas vacillated between being angry about the lines and happy for the price cuts.
“At first, some stores were hiding the eggs, but we told them that we were going to report them and then they started to sell the product,” Luz Paez, a 40-year-old shopper, said in a line for eggs at the market.
Maria Spineli, a 50-year-old shop keeper, said the long lines for eggs caused her to shutter her clothing shop across from the Guaicaipuro market out of fear that the crowd could turn rowdy.
“They want to do away with small businesses,” she said. “At these prices, no one is going to want to sell eggs because it’s below the cost of production. They are going to disappear, and small businesses will have to shut their doors.”
Maduro last month ordered a 30 percent hike in the country’s minimum wage to 9,649 bolivars (about $11.40 a month at the black market rate) to help protect workers’ purchasing power in the face of what he called “induced, speculative, criminal inflation.” The real minimum wage has fallen 36 percent over the past two years, Bank of America said Nov. 10.
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