Caracas - Sliding oil prices are deepening the budget crisis facing the Venezuelan government, which is already struggling to fund its lavish subsidies and rigid exchange-rate controls, analysts say.
Venezuela, which sits atop the world's largest proven crude reserves, relies on oil sales for 96 percent of its budget.
The recent plunge in prices, which have hit a four-year low, is bad news for a government already running a deficit of 15 percent of gross domestic product (GDP).
That may force leftist President Nicolas Maduro to rethink cut-rate oil sales to the nations of Petrocaribe, the club of 18 Latin American and Caribbean allies that pay about half-price for Venezuelan oil.
Some analysts estimate the price tag for Petrocaribe is up to $10 billion (R11 billion) a year for Maduro - and that is rising as crude rates fall.
“This is a situation in which energy agreements may have to be changed, so the decline in revenue is smaller, and it may be time for a more aggressive currency rate adjustment,” said economist Asdrubal Oliveros, who heads the consultancy Ecoanalitica.
Last week, the price of oil slipped to $77.65 a barrel, the lowest since November 2010.
It was the sixth week in a row of falling prices.
The Venezuelan government blamed “a market with abundant supply” and falling global demand.
That has many analysts thinking Maduro is officially between a rock and a hard place, and will have to launch long-delayed economic reforms.
Venezuela's economy is distorted by a rigid exchange rate system that pumps up the bolivar's official value, and government subsidies that keep gasoline cheaper than water - but which are offset by runaway inflation and chronic shortages of basic goods.
According to Oliveros, oil would have to be at $135 a barrel for the government to continue on its current spending path - an unlikely scenario.
Maduro said Friday the government was drafting its 2015 budget with calculations based on an estimated oil price of $60 a barrel.
“We're tightening the screws to make sure not a single dollar gets spent on anything it shouldn't,” he said.
Foreign Minister Rafael Ramirez has meanwhile called for an emergency meeting of the Organization of Petroleum Exporting Countries (OPEC) to try to halt sliding prices.
He said the price drop was due to overproduction in non-OPEC countries - a reference to shale oil, which is booming in the United States and reshaping the global energy market.
Oliveros said if oil averaged $85 a barrel in 2015, Venezuela would lose about $5.1 billion.
“That kind of drop would push (Maduro) to get out of a comfort zone” and make some changes ahead of 2015 midterm elections, he said.
Fellow economist Carlos Carcione, a member of the Socialist Tide - a group that supported Maduro's late predecessor Hugo Chavez but has been critical of some of the incumbent's policies - said the government may not be in as tough a spot as some think.
“I think that for 2014, prices are not that great of a worry because the average per barrel will be around $90,” he said.
The problem would be if the barrel falls under $80 and stays there for some time, he said.
But falling oil prices are not the Maduro government's only headache.
“They also have to clamp down on all the hard currency that disappears due to corruption,” Carcione said.
The government has admitted that $20 billion was given to shell companies in 2012, for which no one has yet been convicted.
So far, Venezuela's 2014 crude price per barrel has averaged $94.58, down from $98.08 in 2013 and $103.42 in 2012. - Sapa-AFP