UPDATE 2-Venezuela's PDVSA aims to restart gasoline production at refinery -sources

(Adds details on gasoline station closures, fuel imports)

CARACAS, March 25 (Reuters) - Venezuelan state oil company Petroleos de Venezuela is trying to repair the catalytic cracker at its 146,000-barrel-per-day (bpd) El Palito refinery in an effort to restart gasoline production at the facility after years of inactivity, three people familiar with the matter said on Wednesday.

U.S. sanctions on PDVSA, part of a push to oust socialist President Nicolas Maduro from power, have made it more difficult for Venezuela to import fuel, resulting in widespread gasoline shortages. The OPEC country’s refineries, which can process up to 1.3 million bpd, are producing at a small fraction of capacity due to years of lack of maintenance.

A plunge in global oil prices as a result of falling demand due to the coronavirus pandemic, as well as a price war between producers Russia and Saudi Arabia, has also left cash-strapped Venezuela with even fewer funds to import goods like fuel.

The repairs at El Palito, which could use pieces and equipment from other domestic refineries, would seek to restore the facility’s ability to produce 91 octane gasoline using Venezuela’s light oil, according to the people, who spoke on the condition of anonymity.

The project, however, faces a number of obstacles, including the long-standing difficulties PDVSA faces in paying contractors. The sanctions on the company have largely cut it off from the global financial system.

PDVSA did not immediately respond to a request for comment on the project.

Authorities have ordered many gas stations shut across Venezuela in recent weeks, as the country implements a nationwide quarantine to prevent the spread of the new coronavirus. The measures have contributed to less demand.

Those that remain open are under control of military personnel, allowing entrance only to “priority sectors” like food and medicine distributors, security forces and patients with urgent medical appointments, according to a document seen by Reuters and a source in Venezuela’s gasoline sector.

The sale restrictions come as the pace of fuel imports into Venezuela slows. So far in March, PDVSA has imported about 91,000 bpd of fuel, according to internal company documents and Refinitiv Eikon data, down from upwards of 165,000 bpd in January and February. (Reporting by Deisy Buitrago in Caracas, Mircely Guanipa in Punto Fijo, Marianna Parraga in Mexico City and Luc Cohen in New York Editing by Paul Simao and Alistair Bell)