Venezuela fin minister says oil may fall to $20/barrel

CARACAS, Feb 8 (Reuters) – Venezuela’s finance minister believes oil could fall to $20 a barrel but not lower, he said in an interview printed on Sunday, and added that President Hugo Chavez’s government would try to avoid social spending cuts.

“We have prepared different scenarios that go from $20 upward. We don’t think it will fall below that level,” Finance Minister Ali Rodriguez told the Venezuelan daily El Universal.

Although Venezuela’s tax take has increased in recent years, South America’s top crude exporter is heavily dependent on its oil income to maintain the high spending requirements of the socialist government.

“If we have to make great sacrifices in public spending, we must make the maximum effort to ensure it is not in the social sector,” Rodriguez said in the interview.

The government planned for an average oil price of $60 a barrel in its 2009 budget, but the average price so far this year for Venezuela’s thick crude was $36.16, Rodriguez said.

Reuters UK