I'm unclear on how you can fix the price of a cryptocurrency. Saying how much you'll buy something back for doesn't set the price people will pay to buy it, because the issuer isn't the only player making the market—people can buy it from each-other, rather than from you, and they can pay whatever they like when they do so.

Look at US treasury bonds: the US can adjust the interest rate on them, but it's the market (dealers holding auctions, etc.) that actually sets the price of them. If everything else is a bad investment (like during the 2007 recession), people will actually buy the likely-negative-yield treasury bonds at a premium, because they need to stick the money somewhere and everything else looks to have a worse NPV. As such, the market value of any security can exceed the value of its call option.

They can set the prices with a simple standing offer to buy and sell at a given rate.

If the Venezuelan government will sell anyone one oilcoin for a barrel of oil, nobody would buy one for more. If the Venezuelan government will buy an oilcoin for one barrel of oil from anyone, nobody would sell one for less.

They almost certainly won't be freely exchangeable to this degree, but there is no problem with price controls in theory.

you're assuming no one would undercut or overbid them. exactly the point is there's no intrinsic reason to assume that

Why would anyone sell an oilcoin to me for less than a barrel of oil when they could sell it to the government for more? (and vice versa)

If you want to fix the price of a currency between (for example) $0.95 and $1.05, you simply offer to sell to anyone at $1.05 and offer to buy from anyone at $0.95. As long as you don't go bankrupt, you can keep doing this and pretty much guarantee the price will never exceed that range even on other market, or people will simply arbitrage the excess away.

Tether tries to do it by holding the total market cap USD in its own reserve (whether or not they actually have it is up to discussion). It's a disaster waiting to happen.

Maybe they are saying "We will do our best to control/manipulate the exchange rate rather than let it float"

Sounds like a blast from the past.