Less Petroleum from Venezuela but Cuban Gas Stations Are Still Operating

Nothing seemed out of the ordinary at a Havana gas station on Wednesday. A sharp drop in gasoline imports has yet to be felt at the pump.

14ymedio bigger14ymedio, Havana, 6 April 2022 — Reuters reports that, in the first four months of 2022, Cuba imported 22,000 barrels of crude oil and gasoline from Venezuela, far less than it previously had, and is struggling to make up the difference.

Gas stations seem to be operating normally for now but the country still needs an average of about 100,000 barrels per day to meet consumer demand. Until recently, Cuba was importing about 70,000 barrels a day, almost a third of which was from Venezuela. The rest came mostly from Algeria and, to a lesser extent, Russia, Italy and the United Kingdom according to a report by Periodismo de Barrio.

U.S. sanctions plunged Venezuela into economic turmoil in 2019. At the time, PDSVA — that country’s state-owned oil company — was providing Cuba with 60,000 barrels of oil a day. That dropped to 44,000 barrels in 2020 and to only 21,000 in 2021. The situation worsened in the first quarter of this year, and the outlook remains bleak for Venezuela, but Washington has expressed a willingness to negotiate lifting some sanctions if Caracas meets some of its demands on human rights.

In negotiations held last month, Biden administration officials discussed the possibility of Venezuela increasing production to ease fuel shortages on the world market caused by economic sanctions on Russia.

Based on an agreement signed by Fidel Castro and Hugo Chavez in 1999, Cuba provides Venezuela with medical services in exchange for petroleum, which in 2016 amounted to 100,000 barrels of oil a day. Havana can scarcely afford to purchase it at the market rate, especially now that prices are sky high. The cost of west Texas crude, the U.S. benchmark, is now at $102.80 a barrel, a 53% increase over the previous year.

According to the country’s energy minister, Liván Arronte, Cuba must pay 20% more in shipping fees and other costs than other countries in the region due to the U.S. embargo.

The state-run press reports that Cuba is meeting its goal of producing twenty-two million barrels a year but admits that this amount is not enough to meet the island’s economic needs or consumer demand.

“Cuban refineries are not fully operational. The Havana refinery — the only facility with a catalytic cracker — is operating at around 70% of capacity. The Cienfuegos refinery sporadically turns 10,000 barrels a day while the one in Santiago is out of service,” said Cuban energy expert Jorge Piñon at the University of Texas.

The island needs the fuel to produce electricity and, though most energy problems like these have been attributed to system failures and breakdowns at electric power plants, the fuel shortage threatens the country’s electrical energy system.

Nothing seemed out of the ordinary on Wednesday, however, at the gas station on the corner of G and 25th streets in Havana’s Vedado district. Customers were waiting in line to refill their tanks as though all was normal. Meanwhile, at the nearby Tangana service station, a tanker truck was replenishing the underground storage tank.

The situation was very different two weeks ago when the Antonio Guiteras and Maximo Gomez power plans urged authorities to restrict retail gasoline and diesel sales to ensure that supplies for public transit and electrical generators would not be disrupted.

This set off the public’s alarm bells. For weeks there have rumors that gasoline would soon be available only for hard currency. Though authorities have denied the rumors, demand suddenly spiked 65% over previous weeks as people began waiting up to eight hours in service stations lines to buy gas.

The state oil company Cupet stated that the situation stabilized once the country’s electric power plants come back on line though the company did not rule out more problems in the near future.


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