What will happen to transportation in Cuba if the Government raises the price of fuel

What will happen to transportation in Cuba if the Government raises the price of fuel

HAVANA, Feb 18. Cuba will likely face a worsening of the transportation crisis when the Government implements its economic package, which includes a drastic increase in the price of fuel.Although, for the moment, the Government has postponed the application of the new prices, claiming that “a cybersecurity incident in the computer systems for the marketing of fuels” has prevented it, uncertainty remains among many drivers.

Rafael is 49 years old, he is a taxi driver and a resident of the Cerro municipality. With his old 1955 Chevrolet, he travels the La Lisa-Old Havana route daily for eight hours. Currently, his vehicle consumes one liter of diesel for every 10 kilometers, which translates into a cost of 600 Cuban pesos per day.

However, if the Government applies the increase as planned, the price of the fuel it needs will skyrocket from approximately 25 to 150 Cuban pesos. This means that Rafael will have to spend more than five times what he spends today on diesel in a single day, in addition to paying the State the 11% tax on his earnings.

This situation, he says, can lead him to make the difficult decision to stop being a taxi driver and lose his livelihood.

“In addition to paying the tax to the State, there are now these exorbitant fuel expenses that make my business unviable,” laments the boatman. “After years dedicated to this job, I will not be able to afford to continue if expenses exceed my income. I feel lost,” he confesses, reflecting the feelings of many taxi drivers in Havana.

In the context of the economic crisis that the country is going through, an increase in the price of fuel will directly impact the cost of transportation, which will make access to transportation even more difficult for citizens.

Manuel Marrero Cruz, Prime Minister of Cuba, announced during his speech in the National Assembly of People’s Power, on December 20, 2023, a series of measures that will have an impact on the country’s economy and Cuban families. One of these measures is the increase in fuel prices for retail and wholesale sales.

According to the prime minister, the measure is necessary because the values of an imported product are not in correspondence with the informal exchange rate. “In what country in the world can you buy nine liters of gasoline with one dollar?” said the official.

The new rates, announced in January, will mean an increase in the value of fuel based on the exchange rate of 120 Cuban pesos (CUP) per dollar, instead of 1×24, in force now.

If the government plan is maintained, it will imply that the price of B83 motor gasoline will rise from 20CUP to 114 per liter or 0.94 dollars; the regular B90, from 25 to 132CUP or 1.10 dollars; the special B94, from 30 to 156, or $1.30; the special B100, from 37.50 to 198CUP, or 1.65 dollars; regular diesel, from 25 to 132 pesos or 1.10 dollars, and special diesel from 27.50 to 150CUP or 1.25 dollars.

According to the Government, the measure will be accompanied by the creation of a network of 28 service centers, of the 613 existing in the country, which will sell fuel in dollars.

Manuel, 40 years old, is a taxi driver residing in the Habana Vieja municipality. With his Moskvich 2140, which runs on a diesel engine, he travels the Alamar-Habana Vieja route every day, spending 160 Cuban pesos on fuel daily. However, with the increase in the price of oil, this expense would skyrocket to 2,400 Cuban pesos per day, a sum that Manuel cannot afford.

This means that he will have to stop being a taxi driver and his license will be revoked since he will not be able to charge passengers what the trip would cost. “I normally charge 150 Cuban pesos per person in my four-seater taxi, but now I would have to increase my rates significantly to cover the costs of maintenance, parts and fuel,” says Manuel, who is also thinking about stopping working as a taxi driver.

Juan is 78 years old, lives in Marianao and owns a 1951 Ford. This car is 71 years old and its adapted engine runs on diesel.

Currently, his main source of income is the trips he makes to the Havana airport, for which he charges 20 US dollars or euros. However, the upcoming increase in fuel prices in Cuba will have a significant impact on his economy.

“I do not have a license to operate my vehicle and these trips are sporadic, which forces me to rethink my rate,” he explains. “The idea of having to increase the cost of my services is difficult for me since I understand the economic situation that everyone is going through,” he adds.

Due to his advanced age, Juan cannot spend all day in the car, but he needs to continue working to cover his basic expenses. The income he earns from these trips is barely enough to eat and pay for parts and fuel to maintain his old car.

He is worried that his situation will worsen with the rise in fuel prices. “My beloved Ford will likely end up in the garage collecting dust, since at those prices I will not be able to continue using it.”

A reporter spoke with a driver on the A10 state bus route. He told him that the increase in fuel prices does not affect him, since the State provides him with what he needs at no cost. “For me, let them raise as much as they want,” said the driver, revealing the disparity in the impact that the increase in fuel prices has on different sectors of Cuban society.

However, the effect that a drop in private transportation can have on the mobility of a city like the Cuban capital can be dramatic.

In October 2023, the minister of the sector, Eduardo Rodríguez Dávila, acknowledged that less than 300 buses were working in Havana, “a city that in the 1980s had 2,500 buses and just four years ago, 600,” he said.