Great article in the New York Times about gas subsidies in Venezuela. You can get a sense of the politics behind bad economic policy:
Venezuela has the world’s cheapest gasoline, about six cents a gallon, a price so low that drivers often fill their tanks for less than a dollar and tip the gas station attendant more than the cost of the fuel pumped into their cars.
Who benefits?
Despite the socialist orientation of Venezuela’s government, the wealthy and middle class benefit greatly from the fuel subsidy because they are more likely to have a car, while the poor primarily benefit through the effect on mass transportation fares. Two researchers at the Harvard Kennedy School, José Ramón Morales and Douglas Barrios, calculated that the value of the gasoline subsidy for the top 10 percent of households in 2010 was about $3,755 a year, compared with $506 a year for the bottom 10 percent.
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