The Cuban dictatorship, led by Miguel Díaz-Canel, announced in recent weeks that the price of fuel will jump by more than 500% on the island, as part of a series of macroeconomic measures by the regime scheduled for this year, which promise to deliver even more the country to misery.
When announcing the new policy for the economic area for the first time, in December, Prime Minister Manuel Marrero stated that the regime's actions will serve to “boost the Cuban economy in 2024”. However, the program includes points that will deeply affect the population, which has been experiencing a crisis for years, marked by shortages of basic products (food, fuel and medicine); galloping formal inflation – currently close to 30% – and even higher informal inflation; frequent blackouts; and partial dollarization of the economy.
With the dictatorship's “shock plan”, the already exorbitant values of products and services on the island will undergo new updates, as is the case with electricity, water and transport, a sector in which “new tariffs will be applied”, as stated by the prime minister, without giving further details of the numbers.
The cost of water supply, for example, will triple for those who do not have a scheduled service and the price of a gas cylinder will increase by 25%.
In the energy sector, domestic consumers will be most affected. The Minister of Energy and Mines stated that there will be a 25% increase for each extra kilowatt (kW) that exceeds the proportion of 500 kilowatts per hour (kWh). In Cuba, homes are responsible for around 60% of electricity costs, according to official data.
Furthermore, the proposal also puts an end to the universal subsidy for the basic food basket, a resource previously available to Cuban citizens. As Marrero announced, the objective of this measure is to move towards “subsidizing people and not products”, in order to obtain a “fairer and more efficient scheme”, in relation to the social and economic inequalities that the socialist country faces.
The official exchange rate of the peso (cup) in relation to the dollar, which has remained at 24 cup for companies and 120 cup for individuals since 2021, will also have a new value this year. In the informal market, the dollar has already risen to more than 270 cups.
The regime also left open a “review” of the number of people currently present on the State payroll, in reference to possible cuts to reduce the costs of the dictatorship in the area. The premier said that authorities must “review the State's structures and models to ensure efficient management” and announced that “there is a group that is studying a law on the organization of the State's central administration”.
Regarding fuel, from February onwards, prices will reach levels above 500%, going from the current 25 Cuban pesos to 132 pesos (R$ 5.36 at the official exchange rate), for both gasoline and diesel.
The price of special gasoline will rise from 30 pesos per liter to 156 pesos (R$6.33), while that of special diesel will rise from the current 27.5 pesos to 150 (R$6.09). The increases would be 520 and 546%, respectively.
The island is highly dependent on imports from allied countries, such as Russia, Venezuela and Mexico and distribution is made using subsidies from the regime. Tourists visiting the island this year will receive a dollar-based charge at approximately 30 stations across the country.
Cuba, governed by Miguel Díaz-Canel, ended 2023 with a contraction of the Gross Domestic Product (GDP) of up to 2% and a fiscal deficit equivalent to 19% of GDP.
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