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Cuba is massively increasing fuel prices

Against the backdrop of a severe economic crisis, the island state of Cuba has announced that it will massively increase gasoline prices. At some gas stations, fuel can only be purchased in dollars because the country urgently needs foreign currency.

Cuba, which is struggling economically, has announced a massive increase in the price of gasoline and diesel starting in February. The price of regular gasoline will be raised from 25 to 132 Cuban pesos per liter, Finance Minister Vladimir Regueiro said. A liter of premium gasoline will cost 156 Cuban pesos from February, more than five times the current price.

In addition, 29 gas stations would be opened across the country that would sell gasoline exclusively for dollars, Regueiro said. This was intended to generate urgently needed foreign currency for the purchase of fuel on the international market. According to the government, foreign tourists will in future be able to pay for petrol with foreign currency.

The aim is to stimulate the economy, correct “distortions” and ensure the supply of fuel and electricity, said Regueiro and Energy Minister Vicente de la O Levy on state television. Price increases are also planned for liquid gas and for households with high electricity consumption from March.

Heaviness Economic crisis in Cuba

The price increases are part of a comprehensive package of measures, the details of which are yet to be presented. The government in Havana wants to combat the budget deficit and raise funds for the import of essential goods. The Communist Party leadership had previously announced difficult measures.

Communist-ruled Cuba is currently experiencing its worst economic crisis since the 1990s. The Caribbean island state has been subject to an extensive US embargo since 1962. According to official figures, gross domestic product shrank by between one and two percent last year, meaning inflation was around 30 percent. The situation has recently worsened, among other things, due to the collapse in tourism during the corona pandemic and the waning of support from its also crisis-ridden ally Venezuela.

In Cuba, among other things, food, medicine and fuel are in short supply – agriculture is also suffering from the latter shortage. Cuba has to import food, but foreign currency is scarce. Even the production of sugar, a core product in the country, was recently no longer enough to cover domestic needs.

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