Democratic senator urges Biden admin to allow diesel swap in Venezuela

By Timothy Gardner

WASHINGTON (Reuters) - Democratic Senator Chris Murphy on Tuesday urged the Biden administration to restore a diesel fuel swap, banned by the previous U.S. president, to provide humanitarian relief to Venezuelan people suffering from economic collapse.

Days before the U.S. election last November, former President Donald Trump's administration banned non-U.S. companies, mainly ones in Europe and India, from swapping diesel for Venezuelan crude oil. It was part of Trump's escalation of unilateral sanctions on state oil company Petroleos de Venezuela (PDVSA), in an unsuccessful bid to oust President Nicolas Maduro, who Washington says rigged his 2018 re-election.

The ban has added to shortages for the fuel used by truckers to transport food and medicine, to generate electricity, and to power agricultural vehicles. Farmers have warned for months that shortages were jeopardizing the planting and harvesting of crops.

"I urge you to restore diesel swaps to help provide much-needed relief to the Venezuelan people as we work toward a political solution to this crisis," Murphy said in a letter to Secretary of State Antony Blinken, a copy of which was seen by Reuters.

Murphy said the ban has created no political leverage with Maduro, threatens to "severely worsen the already dire humanitarian situation in the country" and increased the export of discounted Venezuelan crude to China to raise cash. The letter was first reported by the Associated Press.

The State Department did not immediately respond to a request for comment.

The diesel shortage forced PDVSA this month to begin unprecedented rationing of the fuel to truckers. Industry groups said the rationing would create delays delivering goods to markets in the OPEC nation, reeling from a prolonged economic crisis.

(Reporting by Timothy Gardner; additional reporting by Patricia Zengerle; Editing by David Gregorio)