Crisis in Cuba: After delays, regime confirms fuel, water and electricity increases this week

Long lines to refuel in Havana, Cuba, on January 31, 2024 (Reuters/Yander Zamora)

rule of Cuba The surprise announcement came this Wednesday Will apply Since this Friday, retail fuel prices have increased by a whopping 400%. Which was to come into effect on February 1 but it was postponed.

The measure is part of an adjustment plan – including strong increases in water, electricity and interprovincial transport rates – with which the regime aims to reactivate the national economy, which has been in deep crisis for three years, and reduce the huge public deficit .

According to official media, the announcement was made at a press conference attended by two ministers and to which international media not accredited on the island were invited.

Once the climb begins, Regular gasoline will go from the current 25 pesos (CUP) to 132 (0.21 to 1.1 dollars at the official exchange rate for individuals).

This means that a Cuban must pay 5,280 CUP ($44) to fill a 40-litre tank, when the average state wage is barely 4,200 CUP ($35 at the official exchange rate, but $14.5 in the wider unofficial market). More than. ,

The increase in gasoline has caused great concern among the population, who expect an increase in prices in the country. In January, crowds and long queues were recorded at gas stations, before the regime postponed their entry citing a “cybersecurity incident in computer systems”.

A group of Cubans waiting for public transportation in Havana on October 2, 2019 (Reuters/Alexandre Meneghini)

It was also told in the press conference that on this 1st March Increase in water and electricity rates Which, as a result of the suspension of fuel increases, was likewise stopped “until further notice”.

The announced increase in interprovincial transportation (up to 600%) will not be implemented for the time being, nor will the 25% increase in cylinders of liquefied gas. An increase in wholesale fuel prices, which was supposed to double for public and private transport, was postponed, but foreign tourists have been ordered to pay in foreign currency for gasoline.

In that appearance, the Minister of Finance and Prices, Vladimir Regueiro Ale, assured that the Executive is “aware” that the measure has been taken. “An inflationary effect”, because fuel “is a transverse product of the entire economy”.According to the official website CubeDebate.

The minister said the Cuban regime has adopted “a set of decisions” that “reduce” the inflationary “impact” of this measure, possibly referring to the decision not to impose the planned increase on wholesalers.

The Cuban regime has previously assured that these measures will be implemented only if conditions are met and that vulnerable groups are supported, although at the moment it has not publicly indicated who these population groups are or how they will be helped. .

Regueiro said that current fuel prices “do not recognize the real cost that the country has to bear when obtaining fuel from abroad”: “Those were the old prices And they generated subsidies from the state budget.

Cuba faces The chronic fuel crisis deepens in April 2023. The regime’s leader, Miguel Diaz-Canel, attributed this to non-compliance with commitments by countries that supply crude oil to the island as they face “a complex energy situation”. Venezuela is Cuba’s main supplier of crude oil, while Mexico and Russia have contributed over the past year to ease the island’s severe shortage.

A street in the center of Havana on November 21, 2023 (Reuters/Alexandre Meneghini)

The Cuban regime surprised last December by announcing a major adjustment plan aimed at “correcting distortions”, which has caused great controversy in the country due to the difficult situation in which the majority of Cubans live.

In addition to these increases, the plan contemplated a new devaluation of the peso, still in the study phase, and the progressive abolition of universal subsidies for products to provide a system of assistance to those in need. .

The island closed out 2023 with a contraction in gross domestic product (GDP) of between 1 and 2% (which is still below 2019 levels) and proceeded The public deficit this year will be 18.5%, in big red figures for the fifth consecutive year.

Cuba’s chronic economic difficulties have turned into a serious crisis three years ago due to the pandemic, the tightening of US sanctions, and decisions in national macroeconomic, commercial and monetary policy.

(With information from AFP and EFE)

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