Dubai: Perhaps, all Opec member countries are worried about the precipitous decline of crude prices and the limited options available to take corrective measures in the absence of any cooperation from other producers.

But some countries are hurting more than others, which will reflect not only on the daily life of its citizens but on the country’s strategic plans to modernise and expand the oil industry. The Guardian has said that the oil price decline “sent tremors through the capitals of the world’s great oil powers, many of whom could face testing budget crunches if the tendency persists”.

Venezuela, for example, depends on oil revenues to provide it with 96 per cent of its foreign currency requirements. The decline in oil prices raised doubts whether the country is even able to service its debt in coming months although the government was quick to assure its debtors and bond holders that it is far away from a default.

On October 8, it paid $1.56 billion (Dh5.73 billion) and planned to pay another $3 billion later to holders of maturing bonds. However, some Venezuelan economists thought these payments are made at the expense of reducing imports of foodstuff, medicine and other vital supplies.

Sensing the need for cash flow and economic adjustment, some banks even suggested the sale of Citgo, the huge Venezuelan refining subsidiary in the US. The company owns and operates three refineries with a total capacity of more than 750,000 barrels a day suited to the American market.

The sale was planned by the government at the beginning of the year for an estimated $10 billion, due to increased crude oil production in the US and the reduced profit margins the refineries were generating. However, the Venezuelan government shelved the plan after President Maduro said on September 23 that his government would strengthen the refining company.

This was perhaps to reassure the country’s debtors and to safeguard the position of Petróleos de Venezuela (PDVSA), the national oil company, in the US market.

The PDVSA is planning to expand its domestic refining capacity of 1.3 million barrels a day (mbd) by 265,000 barrels a day, with the expansion doubling the capacity of the El Palito refinery from 146,000 barrels a day to 292,000 barrels a day while expanding other refineries as well. The programme also involves the optimisation of the Paraguana Refining Center (CRP), a 965,000 barrels a day complex, which is one of the world’s largest refineries.

These moves could balance the investment between the upstream and downstream whereas the first was favoured in the past. These are important for Venezuela to renew and invigorate its refining industry and hopes the current market conditions will not force a review of this.

But the price of oil will also affect government programmes in poverty reduction and may even impact popular support. This is especially true if a revision of domestic prices of oil products is underway.

Venezuela is continuing to review the domestic price of gasoline. Former oil minister Rafael Ramirez said in May the country’s policy of selling gasoline for $0.06 per gallon, the cheapest in the world, costs the government $12 billion a year. Such low prices are encouraging smuggling to neighbouring countries.

Oil production is almost stagnant at around 2.9 mbd and even a little decline in the last two years. Plans to increase capacity has not succeeded either for lack of investment or because of major differences with international oil companies. The current plan is to increase capacity to 6 mbd by 2019, a plan viewed with scepticism. The fall in oil prices if sustained would not help PDVSA plans to invest $257 billion between 2013 and 2019.

These circumstances may lead Venezuela to soften its conditions for investment by international oil companies as evidenced by an agreement with Chevron last year to develop an oilfield in the Lake Maracaibo region. Although Venezuelan crude oil is generally heavy, the companies may prefer investing in it over, say, Canadian oil sands, Brazilian pre-salt or even shale oil because its cost of production is lower.

Finally, it is about time for Venezuela and all Opec countries to reduce their dependence on oil and diversify their economies. The ups and downs of the oil market will not go away and countries cannot face the same problems every few years.

Some will tell me this is easier said than done, and I agree. Nevertheless there should be a start somewhere, even if it is a modest one.