Tariff hike in Cuba is like a bucket of cold water and experts fear more inflation

New rates for fuel will begin in February and for energy and liquefied gas in March (Reuters/Yander Zamora)

announcement of Increase in basic services and gasoline rates In the coming weeks, it fell like a bucket of cold water among Cubans and generated criticism among experts on Tuesday.

On Monday night, ministers and high-ranking officials appeared on Cuban television to set the date and amount of the increase, which had already been mentioned by the island’s authorities in December and which had caused unrest.

Fuel prices will increase almost five times, and gas and electricity prices will increase by 25%. According to experts, these figures will put more pressure on salaries.

Officials said the new rates for fuel will start in February and for energy and liquefied gas in March.

“Employees’ salaries are not enough even for the basic basket,” they complained in their statements. The Associated Press Yanei Vazquez of Cuba, a 47-year-old state worker. “They are leading people to demonstrate because they are driving them against the wall. “I’m very Fidelist (referring to Fidel Castro) and I agree with the economy much like Fidel had it, but he’s not there anymore.”

2023 ended up on the island without being able to fly A crisis that started with the pandemic and a massive increase in US sanctions According to officials, pressure is being exerted for political change. Analysts say this affected the quality of life for all Cubans, leading to shortages, long lines, a decline in public services, power outages – especially in July and August – and increased migration.

He speculated, “When one thing goes up everything around it goes up and prices will keep going up and if transportation costs ‘x’ now, it will cost you double ‘x’.” AP Eliezer Perez, 41-year-old jeweler.

2023 ended on the island without separating itself from the crisis that began with the pandemic and the huge increase in United States sanctions (AP).

Prime Minister Manuel Marrero had given this information last December. Popular Power Assemblies -Parliament-on the adjustment plan that was being put forward for 2024, but without specifying the volume of the measures or the dates of application. Then it had already relieved the worries of many citizens.

It was during that very parliamentary session that officials realized In 2023, Cuba’s GDP shrinks between 1% and 2%; And inflation was 30% annually Managing to regain their purchasing power without salaries, especially in the wider state sector after the price increases of 2021 and 2022.

On Tuesday, Vladimir Reguero, the minister of finance and prices, reported that, for example, the price of premium gasoline – which is used by a large share of cars on the island – rose from 30 Cuban pesos to 156 Cuban pesos, fivefold. Will go. More. The behavior of different types of fuels and diesel will be similar.

The price takes on different meanings depending on the exchange rate used for its equivalence in dollars, that is, if it is multiplied by 24 pesos – the official exchange rate – the liter will cost more than $6.00, but 120. For pesos – the rate that the state itself offers when handing over cash to individuals will be 1.3 to the dollar.

What’s more, if the exchange rate on the black market – which Cubans actually use on a daily basis – is considered to be 270 pesos per dollar, the cost of a liter of gasoline would reach 0.5 cents on the dollar.

but anyway A state employee will continue to earn about 7,000 Cuban pesos per month From which you can get approximately 44 liters of gasoline.

The inauguration of new fuel rates will be accompanied by 28 Gas Stations That Will Sell Directly for Dollars And with which they want to support tourism on the island. Preferential wholesale prices will be maintained for transporters.

Price takes on different meanings depending on the exchange rate used for its equivalence in dollars (Europa Press)

The government points out that the rate hike seeks to prop up the battered state budget, which it said suffered both the consequences of the pandemic’s productive decline and United States sanctions, to adapt to international prices.

Miguel Diaz-Canel He rejected that it is a neoliberal package, but rather an adaptation within the framework of US sanctions. And Raul Castro supported the measures.

But experts made this argument relevant.

“Two points of reference: international oil and gas prices are lower today than a year ago, and subsidies for electricity and liquefied gas in Cuba are generally massive,” he wrote on his X account before taking to Twitter. Pedro Monreal, an economist living abroad in Cuba, warned about the impact on citizens’ wallets.

“February inflation in Cuba makes ‘promises’. The retail price of regular gasoline would increase by 428%, which would impact other prices and rates. So far, fuel has not been a factor in the growth of the consumer price index,” Monreal said.


Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button