Direct Fuel Distribution for Tobacco Producers in Pinar del Río: The Cuban Government’s Strategy to Prevent Diversion
In response to the growing fuel shortage and distribution challenges, the Cuban government has implemented a direct fuel delivery system for tobacco producers in Pinar del Río to prevent diversion and ensure efficient supply. By using tanker trucks equipped with GPS technology and mobile point-of-sale (POS) systems, the state-owned company Tabacuba guarantees that fuel will reach the fields directly, meeting the demand of 6,000 producers in the region. This initiative marks a significant change from previous years, when only 40% of fuel reached its final destination.
Modernizing Logistics: Tanker Trucks with GPS and POS Technology
To carry out this strategy, Tabacuba has deployed five tanker trucks—four with an 8,000-liter capacity and one with a 10,000-liter capacity—to distribute fuel across 120 agricultural zones identified in the province. According to Tabacuba representative Osvaldo Santana Vera, these vehicles are equipped with GPS for real-time monitoring, enabling the company to track the route and prevent diversions. Additionally, each tanker is equipped with a POS system to facilitate fuel payments, allocated based on the cultivated area contracted by each producer. This measure aims to reduce non-payment risks and increase control over resource flow, ensuring that producers receive the fuel necessary for the campaign.
Two-Phase Delivery and Secure Storage in Assigned Tanks
Fuel will be distributed in two phases throughout the tobacco campaign, allowing for continuous supply and avoiding interruptions in the production cycle. Farmers can store fuel in assigned tanks according to the volume they are entitled to, optimizing its use and preservation over time. By removing intermediaries from the supply chain, this system reduces the risk of losses during transit from depots to the farms.
Enhanced Control to Prevent Diversion and Ensure Transparency
One of the main goals of this strategy is to minimize intermediary interference in fuel distribution. Recent studies have shown that in previous years, only 40% of allocated fuel effectively reached the farming lands. With this new approach, it is estimated that between 60% and 70% of distributed fuel will reach the farmers directly, enhancing resource efficiency and reducing diversions that impact the Cuban economy across various sectors.
Financing Through Transit Savings
To cover the salaries of the tanker drivers, Tabacuba has calculated savings in direct transport costs from depots to the producers. This savings—estimated at two Cuban pesos per liter—will cover driver wages, making the initiative sustainable without additional funding. This internal financing model aims to increase transparency while advancing operational self-sufficiency amidst severe economic constraints on the island.
Context of Fuel Shortage in Cuba and Its Repercussions
Cuba’s fuel shortage crisis has impacted multiple sectors, including agricultural production and the energy system. The lack of fuel for thermoelectric plants has led to frequent blackouts, affecting daily life and the operations of various industries. Despite initiatives like this direct distribution to tobacco producers, fuel supply challenges persist, highlighting a structural issue that demands long-term solutions.
Tobacco Industry: A Sector of Growth
Despite difficulties, the Cuban tobacco industry has shown notable growth. During the XXIV Festival del Habano, the corporation Habanos S.A. reported record revenues of $721 million in 2023, a 31% increase from the previous year. This performance underscores Cuban tobacco’s strength in the global market, especially at a time of financial limitations. In 2022, Habanos S.A., a subsidiary of Tabacuba, reported sales reaching $497 million, demonstrating sustained sector growth.
Effective Solution or Temporary Measure?
The direct distribution of fuel to tobacco producers in Pinar del Río represents a significant effort by the Cuban government to improve efficiency in delivering critical resources. However, it remains to be seen whether this strategy will successfully ensure that a larger portion of fuel reaches the fields and if this model could be applied to other sectors of the Cuban economy also impacted by resource scarcity.
