2024-01-09 02:08:13
A line of cars near a gas station in Havana on April 24, 2023 afp_tickers
This content was published on January 09, 2024 – 03:08 July, January 9, 2024 – 03:08
(AFP)
The Cuban government announced Monday that the price of gasoline will rise by more than 500% as of February 1, as part of a set of economic measures aimed at reducing the budget deficit.
Finance Minister Vladimir Riguero said on state television that the price of a liter of regular gasoline will rise from 25 Cuban pesos (20 US cents) to 132 pesos (+528%), while the price of super gasoline will rise from 30 pesos to 156 pesos (+520%).
The government also announced that foreign tourists will have to pay for gasoline in hard currency.
The Cuban government, which subsidizes almost all basic goods and services, announced at the end of December a series of measures aimed at reducing the budget deficit, at a time when the country is suffering from a severe economic crisis.
According to official data, the Cuban economy recorded a 2% contraction last year, while the inflation rate rose to 30%.
At the end of December, Economy Minister Alejandro Gil acknowledged that the government could not continue to subsidize fuel prices at a time when the country subject to a US blockade was suffering from a severe shortage of foreign currencies.
Gil said that day, “The country cannot maintain the price of fuel, which is considered the cheapest in the world if we compare it to the prices approved in other countries.”
On Monday, the Minister of Energy and Mines, Vicente Della Ulivi, said that this increase in prices “aims to purchase fuel” and ensure “stable supplies.”
Commenting on this increase, the economist said:
Omar Everlin Perez told Agence France-Presse, “If we compare it to the rest of the world (…) the price of gasoline is very cheap. But if we compare it to salaries in the country, the price of gasoline is very high.”
He added that the new price would affect “the entire community.”
As part of the increases announced on Monday, the government said that the electricity bill will increase, starting from March, by 25% for large consumers in residential areas.
The government also announced an increase in gas prices.
The government said at the end of December that the central bank was studying “what the exchange rate should be against the dollar,” noting that the value of the peso had been reduced twice since 2021.
On the black market, the exchange rate Monday reached 270 pesos to the dollar, more than double the official rate (120 pesos to the dollar).
Cuba, an island with a population of 11 million, is experiencing the worst economic crisis in its history since the collapse of the Soviet Union more than three decades ago.
Many factors contributed to the exacerbation of this crisis, most notably the repercussions of the Covid pandemic, Washington’s tightening of its sanctions on the island during the past four years, and structural weaknesses.
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