Cuban government raises gasoline prices by more than 500% amid crisis

The Cuban government announced this week that it will raise the price of gasoline in the country by more than 500% starting February 1, a decision that is part of a package of economic measures designed to ease the crisis in 2024, but it does not affect the island. Life will become difficult. Since the end of the year, officials started talking about a possible increase in fuel prices, which has now materialized. During an intervention before the Economic Affairs Commission of the National Assembly of People’s Power (ANPP) in December, President Miguel Díaz-Canel said that Cuba has “probably the cheapest fuel in the region, one of the cheapest in the world. Is.” And that, therefore, “everyone here pretty much agrees that it should be raised.”

Then, Prime Minister Manuel Marrero Cruz appeared at the second regular session of the ANPP to announce a package of measures that contemplated, among other things, a fuel price increase. Marrero said, “In what country in the world can you buy nine liters of gasoline for one dollar?” Finally, this Monday Cuba’s Minister of Finance and Prices, Vladimir Reguero, confirmed that a liter of regular gasoline, which currently costs 25 Cuban pesos (0.20 US cents), will cost 132 Cuban pesos ($1.10). Similarly, specialty gasoline will rise by 30 (0.25 cents) to 156 Cuban pesos ($1.30), a significant increase that the country’s drivers will have to deal with this year. However, Cuban leaders failed to mention that these prices were lower than gasoline prices anywhere in the world, but not in a country where the Cuban peso was rapidly weakening against the dollar and where the monthly minimum wage 2,100 Cuban pesos (17.5 dollars).

With this measure, officials equate fuel prices to the current official exchange rate of approximately 120 pesos per dollar. In the informal market, in parallel, the dollar hovers between 260 and 270 Cuban pesos. According to the Minister of Energy and Mines, Vicente de la O Levy, the objective of this increase is to “buy fuel, to be able to supply ourselves (…) to continue purchasing” and “to achieve stable supply”.

From now on, tourists visiting the country will have to buy fuel in dollars through electronic payment methods at the new 28 service centers that the government has created with the measure and will be added to the 613 with which it already exists. Country matters. “The tourism sector and foreign tourists coming to the country exchange the foreign currency they brought with them at 120×1, however, the price of gasoline is currently at 24×1. There we can see subsidies for tourism, abroad, to the person who pays for gasoline at 1.30 USD in the world, here pays for it at 30 Cuban pesos,” said La O. Levy.

Cubans are starting 2024 with not only an increase in the price of gasoline, but also an increase in electricity rates, which will increase by as much as 25% for some households starting March 1. Prices of water, transport services and liquefied gas cylinders will also increase. Officials themselves acknowledged that the increases would be a blow to the Cuban family. “This is going to have a direct impact on the population,” Marrero said.

During the last two years, Cuba has experienced one of the most remarkable crises in its history, with inflation almost 30%, a scenario that for many has surpassed the so-called special period of the early nineties. . Throughout 2023, Cubans faced countless hours of electrical blackouts or long lines to purchase fuel, a situation authorities attributed to the United States economic embargo on Cuba and adherence to agreements by countries supplying gasoline to the island. Is held responsible for failure to do so.