Cuba’s economy on edge: Fuel shortages and rising hardship | Politics
Havana, Cuba — A significant disruption has affected Airbnb hosts in Cuba following the January 21 notification to deactivate listings linked to U.S. bank accounts. The communication reached 26-year-old twins Sandra and Sabrina Gonzalez just days before President Donald Trump signed an executive order imposing potential tariffs on oil suppliers to Cuba.
Sandra explained that their reservations for two bed-and-breakfasts, operating since 2016, were automatically canceled after all booking dates were blocked. The Gonzalez family had previously navigated U.S. tourism sanctions and the challenges presented by the COVID-19 pandemic.
The sisters attempted to reach out to their guests directly, an action against Airbnb’s policies, but their efforts yielded no results. Meanwhile, on February 8, the Cuban government announced a depletion of jet fuel supplies, leading several airlines, including Air Canada and Russia’s Rossiya, to suspend flights. This added pressure on the island’s tourism sector.
Tourism from Canada and Russia comprises Cuba’s largest and third-largest sources of visitors, respectively. In the wake of the cancellations, private accommodations and state-run hotels experienced a notable decline in bookings.
The Gonzalez twins are also facing interruptions in their video production work due to similar constraints. Now, they find themselves contemplating new career paths. “Finding yourself suddenly needing to look for a different job with a significantly lower salary is tough,” Sandra remarked.
The current fuel crisis has further escalated in Cuba. The government limited gasoline sales, creating long waitlists for refueling. Restrictions are part of a broader contingency plan in response to the U.S. oil blockade, which involves decentralizing fuel imports.
Taxi fares have surged as private transport options diminish, with black market fuel prices soaring to $8 per liter, a dramatic 400% increase from early January. Historically, Cuba received a substantial portion of its oil supply from Venezuela in exchange for sending professionals to work there.
In response to the fuel crisis, many state sector employees are transitioning to remote work, while non-essential surgeries have been suspended. College classes have shifted to a hybrid format, aimed at alleviating resource constraints.
Cuban economist Daniel Torralbas indicated that sectors heavily reliant on fuel, particularly transportation and industry, will face the most significant consequences. He noted a nationwide blackout affecting half the country this week and expressed apprehension about the future of the Cuban economy, pointing to a 15% contraction in GDP over the past five years.
“The upcoming year is likely to be one of the most challenging for the Cuban economy since the revolution,” Torralbas stated. He suggested that while businesses providing solutions to the crisis may benefit, the overall impact on the population is severe.
Amid the turmoil, individuals such as 28-year-old Alejandro Candelaria are adapting. After switching to work as a courier and taxi driver on an electric motorcycle, his income has improved due to reduced competition. However, he acknowledged the broader challenges, stating, “Living under these conditions doesn’t benefit anyone.”
As Cuba grapples with these difficulties, student Rafael Mena reflected on the abrupt closure of his university, describing the conditions as untenable, marked by a lack of water and electricity. “It feels like we are back in the COVID-19 lockdown, but now we can go out without being able to move around due to costs,” he noted.
This week, the U.S. Department of the Treasury announced it would allow the resale of Venezuelan oil to Cuba for commercial and humanitarian purposes, but it remains unclear whether Cuban businesses will be able to absorb the costs associated with market rates.
Experts anticipate further governmental measures will be necessary to address the ongoing oil blockade and its impact on the economy. “Without structural changes, we cannot recover,” Torralbas emphasized, highlighting the urgent need for fuel, food, and foreign currency.
