Cuba cracking down on rising fuel theft

Cuba is cracking down on growing oil theft that is aggravating chronic shortages.

One target of the crackdown are magnetic pre-paid cards used by state officials and approved consumers to buy gasoline and diesel, a system that has spawned a black market for the scarce supply. The government is also concerned about safety risks caused by the common practice of diluting the stolen fuel.

According to Cuban state-run media, the government is increasing convictions, with most cases involving workers in the island's state-owned storage and distribution facilities and the state railway system.

Cuban state-owned oil company Cupet told Argus the rising theft has widened a supply deficit since early 2019.

The island now has a gap of about 30,000 b/d compared with 25,000 b/d in January, Cupet says.

President Miguel Diaz-Canel said in January 2019 that he would "declare war on theft and misappropriation of state property, with an emphasis on fuel."

Cuba is accustomed to shortages across its shallow economy, but the oil deficit has worsened in line with a severe economic crisis in Venezuela, Havana's closest ally and its main oil source for the past two decades.

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. Cupet uses the crude in its 65,000 b/d Cienfuegos refinery outside of Havana.

Venezuela's supplies to Cuba have also been affected by expanded US economic sanctions that are sapping already limited fuel supply and increasing power outages.

Washington blames Cuba for propping up the Venezuelan government of President Nicolas Maduro, whom most Western countries no longer recognize as head of state.

Cuba struggles to supplement oil imports from Venezuela with supply from other sources such as Algeria, Russia, Iran and Angola, because these must be paid in cash at a time of reduced foreign earnings from tourism, nickel and sugar.