Cuba ups gasolene prices about 10 per cent

HAVANA (AP):

Cuba has upped already-high gasolene prices by about 10 per cent amid sweeping changes to the economy, a move that could lead to grumbling among cash-strapped islanders, particularly private taxi drivers who are not allowed to raise their own prices.

The changes, which took effect Monday, were announced in the Communist Party-newspaper Granma, which cited rising international prices for the move. It was the first time prices have risen since September 2008, when crude oil internationally sold for about a third more than it does now.

The cost of diesel fuel - used by many of the old cars that populate Cuba's streets - rose to $1.19 a litre ($4.50 a gallon), about 11 cents a litre (42 cents a gallon) higher than previously. The highest octane fuel rose even more to $1.73 a litre ($6.54 a gallon), from $1.51 a litre ($5.72 a gallon).

Highest PRICES

The prices approach those paid in Europe and are apparently the highest in the hemisphere, topping pump prices in Brazil and Bermuda. They are a fortune for Cubans who make the average salary of just $20 a month.

But the changes are not likely to affect many islanders, a reason why past gas hikes here have not led to unrest, as they sometimes do in other developing countries.

Few people on the island own a car, and those lucky enough to have been issued a vehicle through their state-run companies usually have a monthly quota of gas paid through work.

The government heavily subsidises the public transportation system on which most Cubans rely, and it did not announce an increase in those prices.

Those who will take a hit are the thousands of private taxi drivers who use gas-guzzling American clunkers from the 1950s or rusting cars from former Eastern Bloc countries to ferry people along set routes to and from work.

In most cases, the price they charge is set at 10 pesos (about 50 cents). Even before the price hikes, many complained that high fuel costs meant it didn't pay to cruise the city looking for a fare.