The Cuban government raised gasoline prices by more than 500% amid the crisis

The Cuban government announced this week that it will increase the price of gasoline in the country by more than 500% from February 1, the decision is part of a package of economic measures designed to overcome the crisis in 2024, but it will make life difficult on the island. Started talking about a possible increase, which has only 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 maintained that Cuba has “probably the cheapest fuel in the region, the cheapest in the world.” And that , therefore, “everyone here is almost agreed that it should be raised.”

After that, Prime Minister Manuel Marrero Cruz appeared at the second regular session of the ANPP to announce, among other things, a package of measures considering an increase in fuel prices. “In what country in the world can you buy nine liters of gasoline for one dollar?” Marrero said. Finally, this Monday Cuban Minister of Finance and Prices, Vladimir Reguero, confirmed that a liter of regular gasoline, which is currently worth 25 Cuban pesos (0.20 US cents), will cost 132 Cuban pesos ($1.10). Likewise, special gasoline will increase from 30 (0.25 cents) to 156 Cuban pesos ($1.30), a significant increase that the country’s drivers will face this year. Cuban leaders fail to mention, however, that these prices are lower than gasoline prices anywhere in the world, but not in a country where the Cuban peso is increasingly weak against the dollar and where the monthly minimum wage is 2,100 Cuban pesos (17.5). dollars).

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

Henceforth, tourists visiting the country will have to buy fuel in dollars through electronic payment methods at the new 28 service centers the government has set up to scale, adding to the 613 with which it already exists. Country calculations “The tourism sector and foreign visitors who come to the country exchange foreign currency bringing in 120×1, however, currently the price of gasoline is 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 he pays for 30 Cuban pesos,” La O Levy said.

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

During the last two years, Cuba has experienced the most significant crisis in its history, with inflation around 30%, a panorama that for many has surpassed the so-called special period of the early nineties. During 2023, Cubans endured countless hours of power blackouts or long lines to purchase fuel, a situation that authorities blamed on the United States’ economic embargo on Cuba and the failure of countries supplying gasoline to the island to comply with agreements.