Cuban Govt increases fuel prices by More than 500%
Almost all basic commodities and services in Cuba are subsidized by the government, which in late December outlined a set of steps to reduce the deficit during a period of acute economic distress nationwide.
Financially constrained government of Cuba declared on Monday that as part of a slew of economic initiatives meant to close the deficit, fuel prices would skyrocket by more than 500 percent starting on February 1.
According to Minister of Finance and Prices Vladimir Regueiro, the price of a liter of standard gasoline would increase from 25 pesos (20 US cents) to 132 pesos, while the price of premium fuel will increase from 30 to 156 pesos.
Authorities added that visitors to the financially troubled island nation will use foreign money to cover the cost of petrol.
Cuba’s government, which provides subsidies for practically all necessities, unveiled a set of policies in late December with the goal of reducing the deficit during the nation’s acute economic crisis.
Official estimates for 2023 indicate that inflation reached thirty percent and that the Cuban economy decreased by two percent.
Economy Minister Alejandro Gil revealed late last month that the government could no longer sell fuel at “subsidized” prices because the nation headed by Communists was still subject to a harsh US embargo that had been in place for decades and was low on foreign money.
“The nation is unable to sustain the fuel price, which is the lowest globally in comparison to other nations’ prices,” Gil stated.
Economic Omar Everleny Perez told AFP that although gasoline in Cuba is “very cheap, if you compare it with salaries in the country, gasoline is very expensive,” and that the new price structure will have an impact on “the whole of society.”
Along with natural gas price increases, the government on Monday also announced a 25 percent increase in power rates for large residential consumers.
Additionally, it stated that the Central Bank was researching possible new exchange rates for the dollar. Since 2021, the peso has had two devaluations.
The pandemic’s effects, recent US sanctions tightening, and structural weakness are causing the 11 million-person island to face its biggest economic crisis since the fall of the Soviet Union in the 1990s.
AFP