Venezuelan President Hugo Chavez has declared three days of mourning after an explosion at the country’s largest oil refinery early Saturday morning killed at least 39 people, including a 10-year-old boy, and injured more than 80 others.
In addition to the days of mourning, Chavez also ordered an investigation into the cause of the explosion.
“This affects all of us,” Chavez said by phone on state television. “It’s very sad, very painful.”
Vice president Elias Jaua confirmed on state television Saturday evening that among the dead were 18 National Guard troops and six victims who had not yet been identified. Earlier Jaua had travelled to the area in the western part of the country.
While the South American country is a major supplier of oil to the U.S., Canadians are also expected to feel the affects of the explosion at the pumps.
The Amuay refinery and the adjacent Cardon refinery, both part of the Paraguana Refinery Complex, process about 900,000 barrels of crude oil and 200,000 barrels of gasoline per day.
The explosion is the deadliest in memory for the country’s oil industry, but Oil Minister Rafael Ramirez expects the state oil company to resume production “in a maximum of two days.”
"We have sufficient supplies... in the entire country, and our production at the maximum to deal with any situation in our domestic market," Ramirez said. "In that sense, we won't have major effects."
An official of the state oil company, Petroleos de Venezuela SA, said the country also has enough supplies on hand to guarantee its international supply commitments. The official spoke on condition of anonymity because he wasn't authorized to speak publicly about the matter.
But that won’t stop prices from rising at the pump, according to Canadian gas guru Dan McTeague of TomorrowsGasPriceToday.com.
“The Americans will feel it first,” McTeague told CTV News Channel on Saturday.
He said the U.S. imports 2 to 3 per cent of their gas needs from Venezuela, about two-thirds of which comes from the Amuay refinery.
“Needless to say when markets open Monday morning they’ll be looking for the overall supply impact in the U.S. northeast and the U.S. Gulf Coast. They’ll also be looking at Hurricane Isaac and the potential damage it’s doing,” said McTeague. He added that the tropical storm was expected to bring heavy rains to Florida and could potentially move toward Mississippi and Alabama and effect refineries in those states.
McTeague predicts by Tuesday or Wednesday, Canadians will see up to a three cent jump in gas prices.
“You have very few refineries left in Canada, so those that are left tend to usually look at the U.S. market for direction in terms of prices,” said McTeague.
He said with fewer refineries in the country, Canadians feel the effects of any global gas distribution more quickly.
While some predicted gas prices to hit $1.50 per litre this summer, McTeague said that slumps in demand in the U.S. have put some downward pressure on gas prices. However, a number of factor including the Venezuela explosion and further U.S. stimulus funding expects could result in a spike in gas prices.
“The thought being Americans will suddenly find jobs and the demand will go up,” McTeague explained. “It’s a long convoluted story, but it’s sufficed to say that any excuse can be trotted out to drive up prices.”
Meanwhile, officials in Venezuela said oil workers will continue to investigate the explosion scene.
The blast occurred after 1 a.m. when a gas leak created a cloud that ignited, Ramirez said. "That gas generated a cloud that later exploded and has caused fires in at least two tanks of the refinery and surrounding areas. The blast wave was of a significant magnitude."
Nine storage tanks were damaged in the explosion and Ramirez said supplies of fuel had been cut off to part of the refinery.
Images in early hours after the blast showed the flames casting an orange glow against the night sky. One photograph showed an injured man being wheeled away on a stretcher.
"The areas that had to be evacuated were evacuated," Falcon state Gov. Stella Lugo said on television, according to the state-run Venezuelan News Agency. "The situation is controlled. Of course they're still a fire rising very high, but ... the specialists tell me there is no risk of another explosion."
With files from The Associated Press
