The Cuban government announced this week that it will increase the price of gasoline in the country by more than 500% starting February 1. This decision is part of a package of economic measures to alleviate the crisis in 2024 that will make life on the island more difficult. Since the end of the year, the authorities had begun to talk about a possible increase in fuel prices, which has now just happened. During an intervention before the Economic Commission of the National Assembly of People's Power (ANPP) in December, President Miguel Díaz-Canel claimed that Cuba has “perhaps the cheapest fuel in the region, one of the cheapest in the world,” and that is why “almost everyone is here agreed that it should be increased.”
Then Prime Minister Manuel Marrero Cruz appeared at the second regular meeting of the ANPP to announce the package of measures, which included, among other things, an increase in fuel prices. “In what country in the world can one dollar buy nine liters of gasoline?” Marrero said. Finally, the Cuban Minister of Finance and Prices, Vladimir Regueiro, confirmed this Monday that a liter of regular gasoline, currently worth 25 Cuban pesos (0.20 US cents), will cost 132 Cuban pesos (1.10 US dollars). . Likewise, the price of specialty gasoline will rise from 30 (0.25 cents) to 156 Cuban pesos ($1.30), a significant increase that the country's motorists are struggling with this year. However, Cuban leaders fail to mention that these prices are low compared to gasoline prices anywhere in the world, but not in a country where the Cuban peso is weakening against the dollar and the monthly minimum wage is 2,100 Cuban pesos (17.5%) is dollars).
With this measure, authorities are setting fuel prices at par with the current official exchange rate of about 120 pesos per dollar. In parallel, the dollar fluctuates between 260 and 270 Cuban pesos on the informal market. According to the Minister of Energy and Mines, Vicente de la O Levy, this increase is “intended to purchase fuel to be able to deliver.” […] “keep buying” and “achieve a stable supply”.
From now on, tourists visiting the country will have to buy fuel in dollars, through electronic payment methods, in the new 28 service centers that the government has set up to accompany the measure, adding to the 613 with which it already exists. “The tourism sector and foreign visitors coming to the country exchange the foreign currency they bring with them at 120×1, but the price of gasoline is currently at 24×1. There we see the subsidies for tourism, for foreign countries, for the person who pays $1.30 for gasoline in the world, here for 30 Cuban pesos,” said La O Levy.
Cubans are starting 2024 not only with an increase in the price of gasoline, but also with an increase in the electricity tariff, which will increase by 25% in some households starting March 1. Prices for water, transport services and LPG cylinders will also rise. The authorities themselves realized that these increases would be a blow to the Cuban family. “This will have a direct impact on the population,” Marrero said.
In the last two years, Cuba has experienced one of the worst crises in its history, with inflation at around 30%, a scenario that for many has already surpassed the so-called special period of the early 1990s. In 2023, Cubans suffered countless hours of power outages or long lines to purchase fuel, a situation that authorities attributed to the United States' economic embargo against Cuba and non-compliance with agreements by countries supplying gasoline to the island.