US fuel opens a capitalist crack in Cuba

HAVANA: Gasoline selling for as much as $38 a gallon, diesel advertised on social media and fuel stored inside cramped apartments are offering an unusual glimpse of private enterprise in communist Cuba, where the energy sector has long remained firmly under state control.

A US policy allowing American companies to export fuel to private Cuban businesses has triggered an unexpected transformation. As Cuba struggles with shortages, blackouts and a weakened public transport system, imported fuel is creating a growing private market — while also exposing a sharp divide between those who can afford it and millions who cannot.

The change follows the collapse of Cuba’s traditional fuel supplies from Venezuela and Mexico after the United States removed Venezuelan President Nicolas Maduro in January. With sanctions discouraging tankers from sailing toward the island, fuel shortages have increasingly affected transport, hospitals, schools and other essential services.

Under an exception to Washington’s oil restrictions, however, private Cuban restaurants, retailers, taxi operators and other businesses have been allowed to import fuel.

The impact has been striking.

Between February and May, around 900,000 barrels of US fuel entered Cuba — enough to meet only about nine days of the country’s energy requirements. Yet those relatively small shipments have helped create a new network of legal wholesalers, private buyers and illegal resellers.

Gasoline becomes a luxury

For ordinary Cubans, the new fuel market has often brought frustration rather than relief.

On a July afternoon in Havana, 53-year-old Amarilis Sanchez waited for hours at a bus stop after attending her daughter’s birthday celebration. Public buses, which normally cost only two pesos, were unreliable.

Nearby, taxi drivers offered rides in vintage cars, but one driver quoted Sanchez 1,000 pesos for the journey — roughly 500 times the price of a bus ride.

Unable to afford it, Sanchez considered spending the night at her daughter’s home and trying again for a bus the following day.

Her experience illustrates how Cuba’s fuel crisis is creating two very different realities: one for people with access to private vehicles and imported fuel, and another for those dependent on the country’s struggling public transport network.

Black-market gasoline prices reportedly reached $10 per litre, or about $38 per gallon, during the spring before falling as imports increased.

Social media fuels a new market

The emerging trade is increasingly visible online.

WhatsApp groups and Facebook pages advertise gasoline and diesel, while some sellers store fuel in apartments and small shops despite the dangers posed by fire, explosions and toxic fumes.

At one Havana convenience store, a shopkeeper reportedly kept around a dozen 20-litre fuel containers in a backroom, selling gasoline for approximately $5 per litre.

Private companies are also moving into the newly emerging legal wholesale market.

By late July, almost 200 Cuban businesses had received permission to distribute fuel wholesale to other private companies. One company, A Granel, advertises diesel through social media and charges $2.50 per litre for a 940-litre tank.

The promotion reportedly features a model walking through a warehouse of diesel containers while Daddy Yankee’s famous song Gasolina plays in the background — an unusually flashy image for a country where the energy industry has historically been dominated by the state.

Are Cuban gas stations next?

The transformation could go further.

Cuban lawmakers approved a broad package of economic reforms in June aimed at opening the energy sector to private and foreign investment. Prime Minister Manuel Marrero Cruz later announced that Cuba had approved its first foreign investment project focused on importing and selling fuel, although he did not name the company.

The reforms have raised the possibility that private operators could eventually take control of some of Cuba’s familiar state-run Cupet petrol stations.

For now, however, retail fuel sales remain largely under state control.

Some state-owned stations are storing imported fuel but can distribute it only to vehicles belonging to authorised private businesses.

Cuban authorities have defended the reforms while rejecting the idea that they represent a move toward large-scale privatisation. President Miguel Diaz-Canel has accused Washington of imposing a “genocidal siege” on Cuba and said economic changes were not being introduced to satisfy the United States.

A lifeline with a heavy price

The new fuel market has helped prevent some businesses from shutting down completely. During recent power outages, restaurants and shops with generators powered by imported fuel remained illuminated while much of Havana was plunged into darkness.

But experts warn that the emerging system could deepen inequality.

With the average government salary reportedly around $10 a month, imported gasoline remains unaffordable for most of Cuba’s roughly nine million residents.

Cuban sociologist Mayra Espina said the limited fuel supplies had helped prevent “complete paralysis” but warned that the benefits were overwhelmingly concentrated among those able to pay.

The result is an extraordinary contradiction: a small opening toward private enterprise is helping Cuba keep parts of its economy running, while simultaneously making access to basic mobility and energy increasingly dependent on wealth.

For a country that has spent decades keeping fuel firmly within the state system, Cuba’s new gasoline economy may therefore prove to be more than a temporary response to shortage. It could become an early test of how far Havana is prepared to let capitalism into one of its most tightly controlled sectors.