Cuba struggles to buy fuel as imports from Venezuela are increasingly depleted -data According to Reuters

© Reuters. FILE PHOTO: Cars line up to buy fuel at a gas station in Havana, Cuba, July 19, 2019. REUTERS / Alexandre Meneghini

By Marianna Parraga

According to analysts and data, Cuba is struggling to make up its fuel deficit as imports from Venezuela and other countries remain below historic levels and rising global prices due to Russia’s invasion of Ukraine make it difficult to shopping is almost impossible to afford, according to analysts and data.

The Caribbean nation, which relies heavily on fuel imports from political ally Venezuela to meet more than half of its needs, has been dealing with diesel shortages since last month. and gasoline leads to long lines in front of the stations.

Insufficient fuel imports are another major obstacle for the Cuban economy, which is struggling to recover from the coronavirus pandemic and harsher US sanctions imposed by the administration of former President Donald Trump. put.

Venezuelan President Nicolas Maduro has supplied Cuba with more than 32,000 barrels per day (bpd) of crude oil since 2019 even amid US sanctions on both countries. However, the volume of fuel sent to the island has decreased as Venezuela struggles to produce refined products for its needs, according to ship monitoring data.

Cuba imported about 70,000 bpd of crude oil and fuels in the first quarter of the year, well below the roughly 100,000 bpd the Communist-ruled island typically requires to meet normal demand, monitoring data Oil tanker survey from Refinitiv Eikon shows.

More than three-quarters of its shipments come from Venezuela, but the OPEC member nation has drastically cut fuel shipments to Cuba from nearly 44,000 bpd in 2020 to 21,000 bpd in 2021 and 22,000 bpd in the first quarter of this year, data and internal documents from state oil company PDVSA showed.

The Cuban Information Ministry and Venezuela’s PDVSA did not respond to requests for comment.

Venezuela’s Oil Exports to Cuba

Before the pandemic, Cuba’s fuel demand reached 137,000 bpd for fuel oil, diesel, gasoline, gas and other refined products, according to Cuba’s National Statistics Office.

Although the country is consuming about 110,000 bpd of fuel this year, it still needs imports to make up for it, said Jorge Piñon, director of Austin’s Latin America and Caribbean Energy and Environment Program. for domestic production shortages.

“Cuba’s refineries aren’t running 100 percent,” he said. “The refinery in Havana, the only facility with catalytic crackers, is operating at about 70 percent capacity, while Cienfuegos is running oddly,” he said. 10,000 bpd and Santiago is idle,” he said.

Catalytic crackling units are key to engine fuel production.

Last week, Economy Minister Alejandro Gil said the demand for diesel for power generation in Cuba is growing. Cuba is partly dependent on small distributed generation plants that tend to consume more diesel than larger centralized facilities.

According to tanker tracking data and internal PDVSA documents, since September, Cuba has not received any diesel shipments from Venezuela, which has forced Cuba to access the open market for oil. Diesel is getting more and more expensive.

The country exceeded its import budget by $49 million in the first two months of the year due to soaring fuel prices, Gil said. “A shipment of 40,000 tonnes of diesel last month worth $35 million to $36 million is now worth $58 million,” he said.

Mr. Pinon said Cuba’s seven aging thermal power plants, which provide 62% of the country’s electricity, are “the Achilles’ heel of the Cuban energy industry”. “The shutdown due to delayed maintenance of thermal power plants caught them off guard during a time of low diesel inventories. That is causing a domino effect at gas stations.”

Hours-long lines in front of train stations appeared in the Cuban capital Havana in late March as the government began allocating fuel in at least one province.

Venezuela’s diesel supply to Cuba is one of the arguments used by Washington to suspend in 2020 the authorizations it has extended to the South American country’s oil-for-fuel swaps with foreign oil producers.

The island’s energy and mining minister, Livan Arronte, said Cuba – which is still under a US embargo that restricts free trade with the country – is paying transport taxes and other costs more than 20 % compared to importers bringing fuel through similar routes.

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