CARACAS (Reuters) - Venezuela will hike the price of its heavily subsidized gasoline by October, President Nicolas Maduro said on Monday, as the crisis-stricken government seeks to shore up its coffers amid hyperinflation that is accelerating a broad economic collapse.

Venezuela's President Nicolas Maduro participates in the process of buying a savings certificate in gold at Venezuela's Central Bank in Caracas, Venezuela in this handout picture obtained by Reuters September 3, 2018. Miraflores Palace/Handout via REUTERS

Despite the crisis, fuel prices are set so low that the equivalent of $1 buys nearly 400,000 gallons of fuel. That cripples the state’s hard currency earnings and drives a lucrative smuggling trade.

The government on Tuesday will launch a new payment system using a state-backed identification card in border states to limit smuggling, Maduro said, and will increase prices to international levels once that system is in place.

“During the course of September, October, once that system is working, we will establish the subsidy systems and the price of gasoline will be set at the international price,” he said during a televised broadcast.

Maduro did not offer additional details.

Any increase would mark the first time in 20 years that Venezuela has significantly raised fuel prices, which have been a sensitive issue ever since riots broke out in 1989 in response to austerity measures that included higher gasoline prices.

Government regulations have kept prices steady at the pump despite inflation that is expected to hit 1,000,000 percent this year, according to the International Monetary Fund.

Drivers have for years paid for fuel in loose change, often tipping service station workers more than they pay to fill their tanks.

Experts estimate Venezuela - where shortages of food and medicine have fueled hunger, disease and a mass exodus of citizens - loses at least $5 billion a year as a result of not selling gasoline at international prices.

Critics have questioned how Venezuelans, whose salaries have been destroyed by unchecked inflation, could afford to pay the same fuel prices as those facing drivers in the United States.

The new system revolves around a state-backed ID known as the Fatherland Card, which Maduro says is meant to provide better services to citizens through data collection.

Opposition critics say the identification cards are meant to channel subsidies and scarce food and medical services to government supporters, while withholding them from Maduro’s adversaries.