Venezuela to slash spending as oil prices fall

CARACAS, Venezuela - President Hugo Chavez's government will slash public spending to confront the falling price of oil, a top official said Tuesday.

Venezuela relies on oil for 94 percent of exports and nearly half the government budget. Finance Minister Ali Rodriguez said the government has enough savings to avoid serious problems this year but nevertheless plans cutbacks.

The world financial crisis "keeps brewing darker clouds that are affecting us through oil prices," he told Union Radio.

Rodriguez did not provide specific figures but said the government will be "more rigorous" with tax collection to help balance the budget. Some "unnecessary imports" will be eliminated to conserve foreign currency, he said.

Venezuela has already lowered the credit-card spending limit for travelers overseas from $5,000 to $2,500, and their access to foreign cash from $600 to $500.

Venezuela's 2009 budget is based on oil prices of $60 a barrel. But Venezuela's heavy oil basket sold for an average $35.92 a barrel last week — 72 percent below July's average price.

Chavez, who on Sunday won a referendum allowing him to run indefinitely for president, has promised that he will not cut back on the public programs that are the foundation of his socialist revolution.

"Oil could fall to zero dollars, and I guarantee you this revolution will not be detained," he said in December. "Totally the opposite."

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