Cuba imposed widespread price controls yesterday as tighter US sanctions bear down on the already moribund economy.
The price policy affects goods and services provided by the state and marginal private sector alike. State-distributed fuel, which is in chronic short supply, is already subject to controlled prices.
The measures follow a general price surge over the past six months as economic pressures caused by US sanctions deepened shortages, a Caribbean diplomat in Havana told Argus today.
"This is an effort to combat the impact of dwindling foreign currency to finance a range of imports," the envoy said.
President Miguel Diaz-Canel has asserted that the expanded US economic sanctions are sapping already limited fuel supply and increasing power outages.
The Trump administration on 26 July announced sanctions against entities owned by Cuba's military "to ensure US funds don't support Cuban human rights abuses on the island and in Venezuela."
Washington blames Cuba for propping up the Venezuelan government of President Nicolas Maduro, whom most western countries no longer recognize as head of state.
The White House levied the added Cuba sanctions in tandem with oil sanctions on Venezuela in late January 2019. These followed financial sanctions imposed on Venezuela in August 2017. The US sanctions encompass shipping companies and tankers that transport Venezuelan oil to the island. The measures have reduced Venezuela's oil exports to Cuba, but they have not cut them off as the US government intended.
"The siege is closing more and more over our country," Diaz-Canel said after the US State Department announced the new measures last week.
"These restrictions and the financial persecution against Cuba are the main causes of food and fuel supply and the difficulty in acquiring spare parts indispensable to sustain the national electricity system."
Venezuela traditionally supplied Cuba with about 100,000 b/d of crude and products. The shipments have fallen by two thirds since 2015, and are now estimated at around 40,000 b/d. Havana receives the Venezuelan oil in exchange for personnel deployed in security, healthcare and sports, among other fields.
The sanctions expanded Cuba's oil deficit to about 35,000 b/d in June, up from 25,000 b/d in January, Cuban government officials have told Argus.
The sanctions have diminished supply of a range of fuel products, sparking a billowing black market and growing fuel theft, particularly of gasoline, despite the government controls.
Throughput at the 65,000 b/d Cienfuegos refinery fell "slightly" in January-April compared with 2018, according to government officials.
The island's power grid is recovering from two weeks of blackouts caused by technical problems that were exacerbated by the fuel shortages.
Cuba has long been seeking oil supplies from Algeria, Russia, Iran and Angola, but such shipments require cash payments.
The island's two main sources of hard currency have dropped sharply in recent months. More than 8,500 doctors were recalled from Brazil after Brazilian president and Trump ally Jair Bolsonaro criticized Havana. The salaries of the doctors had been paid by Brazil directly to the Cuban government.
In June 2019, Washington banned US cruise ships from visiting the island, after which Havana said it was revising downward by 15pc its forecast for the number of tourists it anticipated this year.
