Cuba to implement over a fivefold increase in fuel prices

The Cuban government recently announced a significant increase in fuel prices in response to shortages and an ongoing economic crisis. Starting in February, the price of petrol will rise from 25 pesos to 132 pesos per liter. The government, which subsidizes many goods, hopes that this measure will help alleviate its deficit. However, this decision further adds to the challenges faced by financially struggling Cubans. Aside from petrol, the cost of diesel and other gasoline types will also see similar mark-ups, along with a 25% increase in electricity prices for major consumers in residential areas, and higher costs for natural gas. In an effort to generate foreign currency for the purchase of fuel on international markets, the government plans to open 29 new petrol stations that will exclusively accept US dollars. The finance minister, Vladimir Regueiro, explained that these measures aim to revive the economy. Cuba has been heavily impacted by economic turmoil caused by the coronavirus pandemic, increased US sanctions, and underlying structural weaknesses. While petrol prices in Cuba may be considered cheap globally, they are considered very expensive when compared to local salaries, according to economics professor Omar Everleny Pérez. This new price structure will have widespread effects on society, particularly for those aspiring to own a car in a country where vehicle ownership is limited. Cuba heavily relies on imports and has faced shortages of food, medicine, and consumer goods in recent years. The price hike exacerbates inflation, leading to higher prices for basic necessities and stagnant salaries for state workers. These economic pressures further strain the population, whose ability to make ends meet is already stretched. The fuel crisis has also had a significant impact on transportation, resulting in long queues at gas stations that can stretch for miles. Filling a vehicle with petrol has become a days-long ordeal, while public transportation has been severely affected. Last year, the government was even forced to cancel Cuba's traditional May Day parade due to shortages.