CARACAS (Reuters) - Mobs gathered outside some Caracas supermarkets on Saturday after the government ordered shops to slash prices, creating chaos as desperate Venezuelans leapt at the chance to buy cheaper food as the country’s worsening economy causes severe shortages.

People wait in a queue to buy food, on a sidewalk outside a supermarket in Caracas, Venezuela January 6, 2018. REUTERS/Marco Bello

The leftist administration of President Nicolas Maduro ordered more than 200 supermarkets to cut prices back to last month’s levels - a tall order in a country where many prices change daily due to the world’s fastest inflation rate.

News of the discounts spread like wildfire, leading hundreds to mass in front of stores before daybreak. When one major supermarket in wealthier eastern Caracas did not open for hours, people began pounding on the storefront.

“We’re hungry! We want food!” screamed the crowd, which included babies, pensioners and children with disabilities.

“This scares me, but what can I do?” said Francisco Guaita, a carpenter hoping to find food for his three children, over the shouts and pushes. “This is the worst government. We want Maduro out.”

Critics say Maduro is playing with fire in the oil-rich nation, where millions are unable to eat three square meals a day and malnutrition is on the rise, saying his policy will dissuade supermarkets from stocking their shelves and could trigger looting.

The socialist, who was narrowly elected to replace the late Hugo Chavez in 2013, counters that he is a victim of a U.S.-led “economic war” in which businesses hoard food and stoke prices to destabilize his government.

The state agency in charge of ensuring “fair prices” ordered some 214 supermarkets owned by 26 chains to drop their prices, pro-government newspaper Ultimas Noticias reported on Saturday.

“This Tuesday we received an accusation and we deployed immediately. We confirmed that the big chains were increasing prices without any justification, because they were doing it for products that were in stock, not new ones,” William Contreras, the head of the agency known as Sundde, told the paper.

Several Venezuelans interviewed in line outside the supermarket in eastern Caracas said they thought Maduro’s policies were a disaster. But they still planned to take advantage of lower prices because they were not able to properly feed their families otherwise.

“It’s bad policy. But we have to eat,” said Edgar Romero, a 45-year-old drummer who supported Chavez but said he has soured on Maduro, as he stood in line under the sizzling sun.

Armed National Guard soldiers later arrived at the store and ordered people into clear lines, warning that they would not be allowed in otherwise. They eventually let the crowd through in small groups just before midday, but people quickly emerged disappointed as only crackers and washing liquid were discounted.

“I can’t feed my kids with this,” said Jesus Gudino, a 29-year-old moto-taxi driver and father of three, sneering at the small plastic bag in his hand. “I’ve been here since 4 a.m. This is a mockery. What can I do? I have to leave this country.” </s> The socialist leader pulled the 100 bolivar note this week before new bills were in circulation, creating a national cash shortage on top of the brutal economic crisis overshadowing Venezuelans' Christmas and New Year holidays.

After two days of unrest over the measure - including one death and dozens of shops ransacked - Maduro on Saturday postponed the measure until Jan. 2.

That helped stem violence, though there were still reports of more lootings in southern Ciudad Bolivar on Sunday.

The detainees include leaders and members of the opposition Popular Will and Justice First parties, Maduro said on state TV, accusing them of following U.S. instructions to incite chaos.

"Don't come and tell me they are political prisoners ... They are the two parties of the 'gringos' in Venezuela," he added, accusing President Barack Obama of wanting to engineer a coup against socialism in Venezuela before leaving office.

From Venezuela's southern jungle and savannah to the Andean highlands in the west, groups of hundreds of protesters have been burning bolivar notes, cursing Maduro and decrying scarcities of food and medicines.

The worst looting was on Friday and Saturday, especially in El Callao and Ciudad Bolivar in the southern state of Bolivar, and police have used teargas to control crowds in some places.

Chinese-run shops have been particularly targeted, witnesses say, and a 14-year-old boy was shot dead in El Callao on Friday.

The governor of Bolivar state said there were 262 arrests there, with lootings from food shops to science laboratories. The local business group said 350 businesses had been ransacked in Ciudad Bolivar, including 90 percent of food outlets.

In Santa Elena de Uairen, near the border with Brazil, shopkeepers and inhabitants formed vigilante groups to join police and soldiers after six shops were ransacked on Saturday.

"We're not lowering our guard, we're forming protection brigades," said local business group leader Gilmer Poma.

Food prices were reduced in some establishments in Santa Elena as a way to defuse tensions.

Maduro, a 54-year-old former bus driver and foreign minister who replaced Hugo Chavez in 2013, has seen his popularity plunge during a three-year recession. He justified the currency measure as a way of suffocating mafia on Venezuela's borders.

But opponents say it is further evidence of disastrous economic policy in a nation reeling from runaway prices and shortages of basics. They want him to resign.

"The only person guilty of the chaos and violence of recent days is Nicolas Maduro," the Justice First party said, accusing intelligence agents of taking advantage of the situation to frame opposition leaders with false evidence.

With the 100 bolivar bill originally out of circulation from Friday, many Venezuelans had found themselves unable to purchase food or fill up cars in the busy run-up to Christmas.

"As if we don't have enough to cope with anyway, now they inflict this craziness on us," said a grandmother in Caracas, Zoraida Gutierrez, 74, who spent a day lining up under the sun to deposit cash she had under her bed.

Despite Maduro's suspension of the measure on Saturday, some businesses were still refusing the notes on Sunday.

Maduro has been urging Venezuelans to use electronic transactions instead of cash where possible, but 40 percent of the country's 30 million people are without bank accounts.

With many people already skipping meals to get by and forced to sacrifice traditional Christmas food and presents, this week's confusion has further exasperated many.

Maduro's popularity recently hit a record low of under 20 percent, according to local pollster Datanalisis.

But Venezuelan authorities thwarted an opposition push this year for a referendum to remove him. That put Maduro on track to finish his term in early 2019 but increased the potential for social unrest due to the lack of an immediate electoral outlet.

Maduro said the first batch of new currency notes would arrive in Venezuela on Sunday afternoon. The government is introducing larger bills of up to 20,000 bolivars. (Additional reporting by María Ramírez in Ciudad; Editing by Mary Milliken) </s> The arrests include 'several managers of large chains' accused of 'speculating and hoarding basic products' that are subject to prices fixed by the government

CARACAS, Venezuela – Venezuelan authorities have arrested 131 people accused of attempting to sabotage reforms implemented by President Nicolas Maduro to alleviate a crippling economic crisis, the attorney general said on Thursday, August 30.

Tarek William Saab said the arrests included "several managers of large chains" accused of "speculating and hoarding basic products" that are subject to prices fixed by the government.

The detainees are accused of trying to "destabilize the economy," Saab added.

Of those arrested, 29 have been permitted conditional release and 10 others exonerated.

Maduro has launched a raft of reforms aimed at ending 4 years of recession and arresting hyperinflation the International Monetary Fund predicts will reach 1,000,000% this year.

One of those policies was to fix prices on 25 basic products, including beef, chicken and eggs, all of which have since disappeared from supermarket shelves.

The socialist government says the prices were agreed following talks with businesses and took into account production costs, but the Consecomercio trade union insists that only 35 companies were consulted and they did not represent the whole sector.

Shortages have forced hundreds of shops to close.

"Some merchants and businessmen made the decision to close, others are waiting to know the rules of the game that will govern us from now on," Consecomercio president Maria Uzcategui told Agence France-Presse.

Even before the uncertainty caused by Maduro's measures, 40% of shops had closed this year, according to Consecomercio.

Meanwhile, people have been leaving Venezuela in droves: 1.6 million since 2015, according to the United Nations.

The exodus has created a migration crisis in other South American countries, particularly Colombia, Ecuador, Peru and Brazil.

Industrial output has dropped to just 30% while oil production is at a 30-year low of 1.5 million barrels a day, according to OPEC, way down from its record high of 3.2 million 10 years ago.

Maduro's reforms included hiking the minimum wage by 3,400% and removing 5 zeros from the currency, which was also devalued to the tune of 96% and fixed to the value of Venezuela's largely discredited cryptocurrency, the petro.

There's also been an increase in value added tax (VAT) and reduced petrol subsidies – Venezuelans pay the lowest prices in the world for fuel.

An extra levy has also been slapped on remittances sent home from expats, while banks have been ordered to adopt the petro as a unit of account. – Rappler.com
After the Venezuelan government orders shops to lower prices, hundreds of people line up to take advantage of these price cuts.