Cuba postpones increase of more than 500% in fuel prices

Cuba aplaza aumento de más de 500% del precio del combustible

HAVANA, February 1. The Cuban government postponed the increase of more than 500% in the price of fuel, scheduled for this Thursday, due to a “cybersecurity incident,”An official reported on Wednesday without giving a new date of entry into force of the measure.

“The decision has been made to postpone the implementation of a government decision linked to the update of fuel prices,” said the Deputy Prime Minister of Economy and Planning, Mildrey Granadillo.

The official argued, in a message on the state news in the afternoon, that the determination responds to “a cybersecurity incident in computer systems (…) whose origin has been identified in a virus from abroad,” which is in investigation.

A man pushes his car when arriving at the gas station, in Havana on January 31, 2024. © YAMIL LAGE / AFP

The authorities had announced at the beginning of the month the increase starting February 1, as part of a battery of measures to try to reduce the large fiscal deficit, which in 2023 was 18%.

This increase “is intended to buy fuel, to be able to supply ourselves (…) to continue buying” and “to achieve a stable supply,” said the Minister of Energy and Mines, Vicente de la O Levy, on January 8.

At the end of December the government admitted that it was unsustainable to continue selling fuel at “subsidized” prices.

The price of a liter of regular gasoline will go from 25 Cuban pesos (0.20 US cents) to 132 (1.10 US dollars), which is equivalent to +528%, while special gasoline will rise from 30 (0.25 US cents). dollar) to 156 Cuban pesos (1.30 dollars), which represents +520%.

– “Domino effect”-

Cuban motorists waited in long lines that stretched for blocks at Havana gas stations on Wednesday, hoping to fill their tanks before the harsh increase.

Motorists fill the tanks of their cars at a fuel station in Havana, on January 31, 2024. © YAMIL LAGE / AFP

Lorenzo Castillo, a 57-year-old independent worker, is clear: “Everything is going to change because now I (…) have to raise my price, the more they raise it for me,” he warned while waiting to refuel due to the threat that On Thursday fuel costs much more.

This Cuban believes that there will be a “domino effect, then life in the family and everything changes, because if a taxi cost me (…) 1,000 pesos, now it will cost 2,000, I don’t know, 3,000,” he says worried. “Everything is a problem.”

For Elena Mas, owner of a technological services company, the increase will have “a very severe impact on the population,” but she recognizes that currently a liter of fuel costs very little: “We have to be realistic,” she says.

Chronic crisis

The authorities also ordered that foreign tourists will begin to pay for fuel in foreign currency.

Cuba faces a chronic fuel crisis, aggravated in April 2023, when the president, Miguel Díaz-Canel, attributed it to the non-compliance of commitments by the countries that supply crude oil to the island because they face “a complex energy situation.”

Venezuela, Cuba’s main supplier of crude oil, delivers 56,000 barrels a day to the island, while Mexico and Russia have contributed over the last year to alleviate the island’s severe deficit.

In addition, an increase in the electricity rate of 25% for the highest consumption sector was announced as of March 1.

The oil tanker docks in Havana Bay on January 31, 2024. © YAMIL LAGE / AFP

The government, which subsidizes almost all of the basic services and goods consumed by Cubans, outlined in December a group of measures to reverse the economic crisis facing the country, due to the effects of the pandemic, the intensification of sanctions imposed by Washington and the internal distortions of its economy.

According to official estimates, the Cuban economy contracted up to 2% in 2023, while inflation closed at 30%, a figure lower than the 39% recorded in 2022.