The harsh measures imposed by the Cuban government to combat the economic crisis and fuel shortages

From next February 1st, when Cuban car owners go to refuel, they will pay 500% more.

This drastic increase is part of a tough package of measures announced this Monday by the government of Cuba in an attempt to stop the serious shortage of fuel and basic resources suffered by the island.

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The cost of a liter of regular gasoline will increase from 25 Cuban pesos to 132 pesos (US$1.10), while special gasoline will increase from 30 to 156 Cuban pesos (US$1.65), as reported on state television by the minister of Farm and Prices Vladimir Regueiro.

Authorities also announced that tourists will pay for fuel in foreign currency.

The Cuban government subsidizes almost all essential goods and services for the population and, at the end of December, announced that it would implement a series of measures to reduce the fiscal deficit at a time of deep economic crisis.

According to official estimates, The Cuban economy contracted by 2% in 2023while inflation reached 30%.

Cuban authorities attribute the crisis and shortages to the tightening of the US embargo in recent years, the pandemic’s impact on tourism and rising global inflation.

What other measures has the government announced?

The government also raised this Monday a 25% increase in the price of electricity for the largest consumers in residential areas and another increase in the cost of liquefied natural gas from March 1.

At the end of last month, the Minister of Economy and Planning, Alexandre Gilrecognized that the government could not continue to sell fuel at “subsidized” prices.

“Can this country maintain fuel prices, which are probably the lowest in the world compared to prices in other countries?“Gil asked himself on the state television program Mesa Redonda.

Cuban gasoline is “very cheap, but if we compare it to the country’s salaries, it is very expensive,” Cuban economist Omar Everleny Pérez told the AFP news agency.

In 2021, the Cuban government began implementing a broad economic reform called “task ordering,” but Cubans continue to suffer a serious economic crisis. (AFP).

The new prices will affect “the whole of society”, added the expert.

Vladimir Regueiro, the Minister of Finance, said that the new measures aim to rectify a situation “group of distortions present in the economy”.

“Some of the prices were outdated in products that cut across the entire economy, related to energy itself, fuels, electricity production and the population’s fundamental consumption,” said Regueiro.

These measures represent one of the biggest macroeconomic adjustments made by the island government in decades in response to a crisis often compared to that of the so-called Special Periodwhen the Union of Soviet Socialist Republics collapsed and Cuba was left without its main economic and political support abroad.

How do these measures affect Cubans?

Queues to buy fuel were a constant on Cuban streets during 2023. (GETTY IMAGES).

According to economist Everleny Pérez, with the increase in fuel prices, “if the car owner transports people, the fare will increase and this ends up affecting the population”.

Although the government tries to alleviate the hydrocarbon shortage with these measures, Rising prices make life even more expensive for Cubans, which in recent years has seen its purchasing power decrease due to inflation, the devaluation of the Cuban peso against the dollar and the decline in tourism, the island’s main economic driver.

Several users on social media doubted the effectiveness of the government’s measures.

“Clear, This will also increase the prices of everything else, such as transportation, food, etc.. The old man who earns 1,300 pesos in retirement already lives in deep vulnerability. What will happen to him from now on?” asks a user named “Cubano” in the comments section of the Cubadebate website.

“I’m a civil servant, I earn 3,000 Cuban pesos. If so far this month I have only received half a kilo of sugar, half a kilo of mortadella, 7 eggs and everything else, I have to buy it on the private market in any of its versions, How can I agree that they continue to make my life more expensive?”wrote “Raisel.”

It is believed that since 2021, Cubans have migrated in record numbers to the United States. (REUTERS).

Fuel shortages severely plagued Cubans throughout 2023. At the worst of the crisis, lines of cars to refuel with gasoline stretched for several blocks.

In the midst of despair, The island’s government reached an agreement with Russia to receive 30,000 barrels of crude oil per day.

The objective of this negotiation was to recover the inflow of oil after Venezuela reduced its exports to Cuba.

In addition to fuel shortages and high prices, Cubans also face food and medication insecurity.

The black market and family remittances They continue to play a vital role in purchasing multiple basic products on the island.

The serious situation sparked unprecedented anti-government protests in 2021 and what is believed to be the largest migratory exodus to the United States since 1959when Fidel Castro’s socialist revolution began.

Source: Elcomercio