At the beginning of January, Cuba announced that fuel prices would rise by more than 400 percent as of February 1. This five-fold increase was canceled due to a “cybersecurity incident” and postponed.

The Communist government’s Finance Minister, Vladimir Riguero, announced yesterday that the price would rise five times as of March 1.

Fiscal deficit

The price of a liter of regular gasoline with octane number 91, which is not available in the Netherlands, rises from 25 Cuban pesos (19 cents) to 132 pesos (5.08 euros). The gasoline we fill in the Netherlands will cost €6.01 per liter in Cuba as of tomorrow.

For comparison: in the Netherlands we currently pay about 2.16 euros for this.

What is the reason for the sudden increase? Cuba needs money and with this measure the government is trying to reduce the budget deficit. It is noteworthy that the price of public transportation remains the same.

Corona repercussions

The country, with a population of 11 million people, is currently experiencing the worst economic crisis since the collapse of the Soviet bloc in the 1990s.

This is partly due to the repercussions of the Corona pandemic and the tightening of US sanctions. In addition, the entire Cuban economy has been structurally weakened in recent years. Last year, the official inflation rate was around 30%, but experts believe the value of money has actually become less.

Government support

Cuba constantly faces shortages of gasoline and other basic products. The government subsidizes almost all goods and services that Cubans consume.