The Cuban government has announced that, starting from the first of February, the price of gasoline will be increased by over 500% as part of a series of economic measures aimed at reducing the budget deficit.
Finance Minister Vladimir Regueiro announced on state television that the price of a liter of regular gasoline will increase from 25 Cuban pesos (equivalent to 20 US cents) to 132 Cuban pesos, marking a 528% rise. Meanwhile, the price of premium gasoline will go up from 30 Cuban pesos to 156 Cuban pesos, which is an increase of 520%.
The government also announced that foreign tourists will have to pay for gasoline in foreign currency.
The Cuban government, which subsidizes nearly all essential goods and services, announced a series of measures at the end of December aimed at reducing the budget deficit, at a time when the country is suffering from a severe economic crisis.
According to official figures, the Cuban economy experienced a contraction of 2% in the past year, while the inflation rate rose to 30%.
At the end of December, Economy Minister Alejandro Gil acknowledged that the government cannot continue to subsidize fuel prices at a time when the country, which is under an American blockade, is suffering from a severe shortage of foreign currency.
Gheil stated that day that “the country cannot maintain the fuel prices which are considered the cheapest in the world if we compare them with the prices adopted in other countries.”
On Monday, the Minister of Energy and Mines, Vicente de la Oleví, stated that the purpose of the price hike is “to afford fuel purchases” and ensure “stable supplies.”
Commenting on the increase, economic expert Omar Everlini Perez told Agence France-Presse, “If we compare it with the rest of the world (…) the price of gasoline is very cheap. However, if we compare it with the wages in the country, the price of gasoline is extremely high.”
He further mentioned that the new price will have an impact on “the entire community”.
Within the context of the announced increases on Monday, the government stated that the electricity bills will rise by 25% starting from March for the major consumers in residential areas.
At the end of December, the government announced that the central bank was in the process of evaluating “what the exchange rate against the dollar should be,” noting that the value of the peso had been devalued twice since 2021.
In the black market, the exchange rate on Monday reached 270 pesos per dollar, which is more than double the official rate of 120 pesos per dollar.
Cuba, an island with a population of 11 million, is experiencing its worst economic crisis in history since the collapse of the Soviet Union over three decades ago.
Multiple factors contributed to the exacerbation of this crisis, most notably the repercussions of the COVID pandemic and the intensification of sanctions by Washington against the island over the past four years, in addition to inherent structural weaknesses.
AFP
