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Friday, 5 April, 2002, 07:06 GMT 08:06 UK
Venezuela oil dispute escalates
Venezuelan oil workers
Oil workers picketed fuel depots in last year's protest
The dispute between Venezuelan oil workers and the government has intensified, increasing the risk of a supply squeeze.

Protests already caused some disruption to oil supplies on Thursday, and the workers at state-owned oil firm PDVSA vowed to step up the strike on Friday.

"Workers of all sectors of PDVSA are starting today a progressive, collective suspension of work in operational and administrative areas," a spokesman for the group said.

But the Venezuela government has vowed to keep the state oil firm running at all costs.

The news comes amid growing concern over global oil supplies due to political troubles in the Middle East.

Venezuela is the world's fourth largest exporter of crude oil and is a key supplier to the US market.

Crippling economy

Long queues were forming at petrol stations around the country during the night, as fears of petrol shortages grew.

But Vice-President Diosdado Cabello tried to reassure both domestic users and international customers.

"We don't accept manipulation or blackmail," Mr Cabello said.

"The government has its contingency plans and will not hesitate to apply them if it is necessary."

President Hugo Chavez had previously warned that he will send in the armed forces to take over the company if necessary.

An all-out strike at PDVSA could cripple the country's oil-reliant economy.

The sector accounts for about a third of Venezuela's total economic output, 80% of export earnings and about a half of government income.

In search of meritocracy

The row was sparked by the appointment of five executives to the board of PDVSA by Mr Chavez.

Workers said the executives were given the posts for political reasons.

In Caracas, executives massed outside company headquarters, chanting "meritocracia - si, politicizacion - no".

Last month, Venezuelan oil workers participated in a two-day strike over promised pay rises that have still failed to materialise.

The government declared the strike illegal and took a hard line with protestors.

See also:

21 Mar 02 | Americas
Clashes erupt on Venezuela streets
27 Feb 02 | Americas
Venezuela divided over Chavez
29 Mar 01 | Business
Venezuela outlaws oil strike
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