The Cuban government on Monday raised petrol prices by up to 18 per cent, after keeping it prices at the pump unchanged for two years, according to dpa. In a statement published in the official Communist Party daily Granma, the Finance and Pricing Ministry referred to the "significant instability of international prices." "The average international price for oil in the course of this year, and its forecast, are more than 25 per cent above that of the year 2009," the statement said. This affects the economy of the island, the ministry noted. The largest increase of 18 per cent applies to special petrol, which went from an estimated 1.18 dollars to 1.4 dollars per litre. Regular petrol and diesel, in turn, went up by 15 per cent from 1.08 to 1.24 dollars per litre. The price increase is set to affect private vehicles and privately operated public transport companies. However, many Cubans buy their fuel in the black market, below the government price, and sometimes even sold in the same state-owned petrol stations as the official fuels. Cuba imports around 93,000 barrels of oil per day from Venezuela to cover just over half of the island's demand. Cuba produces some of its own oil, which is used mainly in power generation. The Cuban economy is in a severe crisis, a consequence of the global financial downturn, the decades-old US embargo on the island and the devastation caused by hurricanes in 2008, as well as chronic low productivity in many of its state companies. The island's authorities are introducing limited reforms and recently announcing plans both to eliminate 500,000 jobs in the sprawling state sector and to licence small private businesses in 178 different areas of economic activity, as well loosening rules on rental housing. The government, however, insists that it will not abandon socialism.
