The Government Is Also Raising the Prices of Electricity and Fuel To Penalize Cubans ‘Who Use the Most’

In practice, the price of fuel will go up in in March and for electricity at the beginning of April. (14ymedio)

14ymedio bigger14ymedio, Havana, 9 January 2024 — According to the Government, electricity and fuel will cost Cubans 25% more beginning March 1, when a new tariff, designed to “correct distortions” in the state budget, becomes effective. The price increase will affect those who use more than 500 kilowatts per hour (kWh) of electricity and all those who receive propane tanks, who will pay 225 pesos, 45 more than the current 180.

During their appearance this Monday on the television program Mesa Redonda, the ministers of Energy and Mines, Vicente de la O Levy, and of Finance and Prices, Vladimir Regueiro Ale, alleged that their goal is not to ruin the pockets of Cubans but to find a “fair” system to penalize “those who use the most” and, by the way, to revive the state coffers.

In practice, fuel will rise in price in March, but the increased charge for electricity will not be until the beginning of April.

In the case of propane, the ministers admitted that the argument of “saving” does not explain the increase in the price to the 1,700,000 customers who receive it today, but that in any case the additional cost will contribute to “eliminating the subsidy on imports” and transfer it to points of sale throughout the country.

In the case of propane, the ministers admitted that the argument of “savings” does not explain the increase in price to the 1,700,000 customers who receive it today

De la O Levy insisted that for several years they have been studying how to make the “high consumers” pay more, which in 2023 were 107,570 customers of the 4,078,909 that make up the residential sector. The senior official tried to reassure viewers with a fact: only 2.7% of the members of this sector consume more than 500 kWh on a regular basis, although in July and August the figure “increases to 217,000 customers,” 5.4% of consumers.

The non-residential sector – 39% of the country’s consumers, according to the minister – is easier to control. “We have put up with it,” he celebrated, alluding to the constant inspections and energy restrictions that his office has directed throughout the country.

“It’s not to harm anyone,” he said. “We know that we have reserves to achieve savings in our homes, which without decreasing the standard of living can be adjusted to 500 kWh or be very close to that. There are customers who exceed 500 kWh in July and August but then not in the rest of the year.”

The minister explained that customers who use 600 kWh with the current rate pay about 2,451 pesos, but beginning in March they will have to pay 2,681. The increase is only 230 pesos, he clarified, because the additional cost only applies to the kWh that exceed 500, subject to the penalty.

He continued: “If I use 700 kWh today, I would pay 3,396 pesos; with the new rate it would be 3,862 pesos, an increase of 13%. For a consumer of 1,800 kWh, the cost grows by 22%. He currently pays 14,901, while in the future he would pay 18,355 pesos,” and so on.

During the program, both ministers offered data on the circumstances that, in their opinion, make the increase in prices indispensable

The increase in the price of gas will “unload” the state Union Cuba-Oil (Cupet) of about 280 million pesos that it had to request from the State for transport and other expenses, claimed Regueiro Ale. “It is not precisely the savings that is encouraged, but we do manage to recover the reduction of subsidies in that value chain, because the company (Cupet) can recognize the costs and expenses it has been incurring,” he said.

A network of social workers has identified “vulnerable people and nuclei,” who will not be able to “face” the new prices and for which measures are “being studied,” such as granting “subsidies to people who really require differentiated attention according to their capacity, their purchasing power.”

During the program, both ministers offered data on the circumstances that, in their opinion, make the increase in prices indispensable. First of all is the fact that 2023 was a record year of electricity consumption, which reached 64.5 gigawatts per hour in July.

In addition, in 2023, 2,300,000 household appliances entered Cuba, fewer than in 2022 – 3,430,000 devices – but much more than in 2021, when 2,240,000 arrived. The Island has half a million electric motorcycles, “which are mostly charged from the electrical system and not from renewable energy sources because we don’t yet have those possibilities,” they reported.

De la O Levy also said that inspectors are detecting more and more electricity fraud, and the deficit of meters in the country facilitates the increase in illegalities

De la O Levy also said that inspectors are detecting more and more electrical fraud, and the deficit of meters that the country is going through facilitates the increase in illegalities, he lamented. “The other thing is the fraud from manipulating the meter, diverting the circuit from the house or getting the direct connection outside the meter. We are having a strong battle to end that. We are going through 226,000 frauds detected in the last period, and we know that fraud is being committed because we are reading it in the difference between the energy that is generated and the energy that is charged. There are commercial losses, but the difference is that these being stolen from us. What they steal is almost what the Guiteras plant generates,” he explained.

The increase in electricity and gas prices follows that of fuel – which the ministers also reported on Monday – the cost of which will be quintupled beginning February 1.

Translated by Regina Anavy


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