Peter Wilson

Special for USA TODAY

CARACAS, Venezuela — In a country that has the world's largest oil reserves and the cheapest gas on the planet, Venezuelans have become accustomed to paying just a few pennies for a gallon of gasoline. It has been one of the few bright spots in a cratering economy racked by rampant inflation and shortages of basic goods.

The depth of Venezuela's economic woes was underscored dramatically by the socialist government's decision this week to hike heavily subsidized gas prices by as much as 6,000%, starting Friday.

Embattled President Nicolás Maduro announced the first increase in gas prices in nearly two decades to avoid a default on Venezuela's foreign debts, which are becoming more burdensome as the country's economy continues to plunge along with the global price of oil, Venezuela's main export.

Gasoline prices will rise to $2.85 a gallon for 95 octane, and to 38 cents for 91 octane, based on the official exchange rate of 10 bolivars to the dollar. Of course, at the widely used black market rate, where a dollar costs 1,000 bolivars, gas will still go for just a few Yankee pennies.

“This is a necessary measure, for which I assume the responsibility,” a somber-looking Maduro said Wednesday evening during a televised four-hour address. He also announced a 37% currency devaluation, a raise in the minimum wage from $965 to $1,158 a month and new state-set prices on about 100 goods and services, all of which are sure to rise. “Our gasoline is the cheapest in the world,” he reminded Venezuelans.

In anticipation of Friday's higher prices, drivers have formed long lines at gas stations to fill up their tanks.

The long expected price hike was grudgingly accepted by many here as a needed reduction in government gas subsidies that cost billions of dollars annually, especially as inflation is expected to top 700% this year and the economy is forecast to contract 8% — following a 10% decline in 2015.

“I can accept an increase in gasoline prices, but only if the government stops giving away oil to Cuba and other Caribbean nations,” said Roberto Duran, 45, a technician from Caracas. “I don’t mind paying more, but this has to be part of a comprehensive package of reforms.”

Venezuela sends about 90,000 barrels of crude oil a day to Cuba in return for Cuban doctors, dentists and other medical specialists sent to Venezuela to work.

Cuba has been a close ally ever since Hugo Chávez was elected president in 1999 and led a socialist government until his death in 2013. Maduro, his hand-picked successor, has never been as popular, as the economy has steadily deteriorated on his watch. His approval rating hovers around 25%, according to recent polls. And in December elections, the political opposition won control of the legislative branch for the first time in 16 years.

Venezuela's opposition wins legislative majority

In 1989, a hike in gas prices and increases in public transportation costs led to days of rioting that claimed thousands of lives. So far, reaction to the new gas prices has been far more muted, given all the other economic problems people here must confront.

Venezuela is beset by huge shortages of food, medicines and staples such as toilet paper and shampoo, the result of government price controls and artificial foreign exchange rates that discourage importers from doing business in the country.

Francisco Martinez, who heads the country’s largest business association, welcomed some of the announced economic measures as overdue. "We hope that after these announcements ... we can work on the structural problems in the economy to put this recession behind," he said.

Martinez said the government's attempt to blame all of the country's economic problems on the private business sector only prolonged the crisis.

Maduro, who has vilified the business community, has been reluctant to cut spending on social programs that aid the poor, his biggest supporters. However, the plunge in world oil prices has caused Venezuela a cash crunch in a year when it faces $14 billion in foreign debt payments.

To cover domestic expenditures, the central bank has flooded the economy with bolivars, which is why inflation is out of control and the value of the currency has plummeted.

To address that problem, Maduro announced Wednesday that Venezuela will now have two official foreign exchange rates: 10 bolivars to the dollar for essential food and medicine imports, and a new floating rate that last closed at 200 to the dollar for everything else.

The president's critics say they doubt his latest moves will reverse the country's economic — or his own political — fortunes.

"We just get poorer and poorer," said William Martinez, 47, a shop owner in the central industrial town of La Victoria. "Gasoline was the only bright spot here. And now we don't even have that."