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Cubans resigned to rising costs as gas price soars overnight

March 1, 2024
in Business
Cubans resigned to rising costs as gas price soars overnight
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Cubans resigned to rising costs as gas price soars overnight
© Reuters. FILE PHOTO: A pump is pictured at a petrol station, in Havana, Cuba, February 11, 2024. REUTERS/Norlys Perez/File photo

By Dave Sherwood

HAVANA(Reuters) – Cuban Luis Collado was pleasantly surprised by the unusually short line – at least by Cuba standards – of just a few vehicles on Havana’s waterfront on Friday.

He was less impressed with the cost of fuel, he said, which had jumped fivefold overnight as the government made good on the first of a series of price hikes it says are necessary to shore up the communist-run country’s collapsed economy.

“For me personally, this means I’ll have to save more and drive less,” Collado told Reuters in an interview from the window of his small gray Kia.

Like many in Cuba, the Havana resident and civil engineer said he understood the need for the price rises.

“Gasoline in Cuba was the cheapest in the world. … We were giving it away,” he said. “But an increase (in the fuel price) should be accompanied by corresponding increase in salaries.”

Until Friday, Cuba’s fuel was indeed among the cheapest in the world, according to online database GlobalPetrolPrices.com, with a liter of “Special” (94 octane) gasoline selling for 30 pesos, or less than 10 cents, at the current black market exchange rate.

Under the new pricing scheme, a single 40-liter (11-gallon) tank of fuel will cost 6,240 pesos, or about $20 at the black market exchange rate, well over the average monthly state salary in 2023 of 4,856 pesos, or $15.66.

Officials say the fuel price hikes – which include selling some gasoline in dollars – would help Cuba purchase more fuel to stem long-running blackouts and fuel shortages on the crisis-racked Caribbean island.

Cuba in late December announced the hike in the price of gasoline, as well as targeted increases in the price of public transport, electricity and cooking gas, in a bid to narrow a ballooning fiscal deficit. Critics say the policies are inflationary and ill-timed.

Officials said they had decided to limit the fuel price rises on March 1 to the retail sector and would continue to subsidize public services such as transportation to soften the blow on consumers.

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : Investing.com – https://www.investing.com/news/economy/cubans-resigned-to-rising-costs-as-gas-price-soars-overnight-3322027

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