Venezuela Hit By Blackout Further Dragging Down Local Economy

Venezuela Hit By Blackout Further Dragging Down Local Economy
In the last hour, two blackouts ran through the region of Venezuela. This prompted the oil sector to spend millions per day just to address the outage problem. As per the head of Fedecamaras Federation of Chambers of Commerce and Production Carlos Larrazabal, the total amount of loss that the local economy incurs per day if there is a widespread blackout reaches about $200 million.The electricity cut affected all sectors in the country with food companies being hit the worst. Since food storage heavily relies on electricity to keep food fresh, the power outages caused many food chains' food supply to spoil. To make things worse, the country already had a food shortage problem to begin with. Adding the spoilage from the food companies just added more problems to the country's existing set of woes.Representatives from various sectors have stated that the very first major blackout that hit Venezuela incurred a loss of $1 billion from the local economy already. If this keeps up, the country would suffer even heavier damage with more losses at hand.The oil sector was also badly hit by the power outages. According economist Luis Oliveros, production of oil already hit the zero mark at the peak of the blackouts. The oil industry is known to bring in 96% of the revenues of the country. With the production reaching almost none due to the blackouts, the economy as a whole further suffered damage.Making matters even worse, a US sanction that prohibits purchase of oil from Venezuela will take effect starting April 28, 2019. According to analysts, oil purchases from America make up 75% of the profits earned by the PDVSA. If Venezuela loses one of its biggest customers, this could mark the start of slow economic deterioration.All retailers and producers were affected by the blackout leading to the slowing of the overall local production.

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