Cuba Postpones Fuel Price Hike After Alleged Cyberattack
The Cuban government has delayed a planned over 500% increase in fuel prices that was scheduled to take effect on February 1st, 2023 due to an alleged “cybersecurity incident,” a government official announced on Wednesday.
Earlier this month, authorities had announced the price hike as part of a series of measures aimed at decreasing the country’s large fiscal deficit, which reached 18% in 2022.
“The objective of this increase is to be able to purchase fuel, supply ourselves […] to keep buying and achieve stable provision,” Minister of Energy and Mines Vicente de la O Levy said on January 8th.
Under the new pricing, the price per liter of regular gasoline would have jumped from 25 Cuban pesos (0.20 USD cents) to 132 (1.10 USD), a 528% increase. Meanwhile, premium gasoline was set to rise from 30 Cuban pesos (0.25 USD cents) to 156 pesos (1.30 USD), a 520% hike.
The government had also stipulated that foreign tourists would begin paying for fuel in foreign currency.
In addition, a 25% increase in electricity rates was announced, set to take effect March 1st for higher-consumption sectors.
The government, which subsidizes nearly all of the basic goods and services consumed by Cubans, outlined a series of measures in December aimed at reversing the economic crisis facing the country due to the effects of the pandemic, tightened U.S. sanctions, and internal distortions in its economy.
According to official estimates, the Cuban economy contracted by up to 2% in 2022, while inflation closed at 30%, lower than the 39% rate seen in 2021.
Citizen Reactions
On Wednesday, Cuban motorists waited in long lines stretching for blocks at gas stations in Havana, rushing to fill up their tanks before the steep price hike took effect.
“Everything is going to change because now I […] have to raise my price, the more they raise it for me,” said Lorenzo Castillo, a 57-year-old independent worker waiting his turn to refuel, thinking that fuel would cost much more starting Thursday.
This Cuban believes there will be a “domino effect, so family life changes and everything, because if a taxi cost me […] 1,000 pesos for transportation, now it will cost 2,000, I don’t know, 3,000,” he says worriedly. “Everything that goes up, inflation, everything is a problem.”
Alleged Cyberattack
Vice Minister of Economy and Planning Mildrey Granadillo announced Wednesday evening that the government has decided to postpone the fuel price hike due to a “cybersecurity incident affecting the computer systems […] whose origin has been identified as a virus from abroad,” which is under investigation.
Granadillo did not indicate what information or data was compromised by the alleged cyberattack.
According to the government’s rhetoric, the need to update fuel prices arose in order to promote savings and control demand, as well as in response to high fuel prices internationally.
Although authorities insisted that “updating” prices would eliminate fuel subsidies for foreign tourists, the more than 420% increase in prices also affects the general population.
Government officials also claimed the price adjustment would allow resources to be reallocated to other vital areas of domestic goods and services production, but many people believe the promise will not materialize.
The sale of fuel in foreign currency through USD cards at gas stations was also supposed to begin across Cuba on Thursday, February 1st. The stated goal is to “re-supply” the network of gas stations in Cuban pesos with the revenue in foreign currency.
However, the population has shown strong rejection and discontent since the measure was first announced.
