US Fuel Sales to Cuban Businesses Crack Open a Communist Energy System

For decades, Cuba's communist government controlled almost every drop of fuel on the island. But now, for the first time since Fidel Castro's revolution in 1959, small amounts of American gasoline and diesel are reaching Cuban businesses. The change has created a messy black market, pushed fuel prices sky-high, and revealed a deep gap between rich and poor Cubans.

The United States has long enforced a tough embargo, or trade ban, against Cuba. Recently, the U.S. made an exception: American companies can now sell fuel to private Cuban businesses — but not to the Cuban government. This small opening has changed life on the island in surprising ways, sparking both hope and new problems.

Cuba used to get most of its oil from Venezuela and Mexico. That supply stopped suddenly when the U.S. removed Venezuelan President Nicolas Maduro from power in January. U.S. Coast Guard ships now patrol waters near Cuba, and most oil tankers are too afraid of sanctions to attempt deliveries, leaving the island in a serious fuel crisis.

Between February and May, about 900,000 barrels of U.S. fuel arrived in Cuba — enough for only about nine days of the country's needs. Even so, it was enough to create a whole new underground economy on the island. Reuters reporters visited black market sites and spoke with business owners, economists, and regular Cubans to find out what was really going on.

Some of that fuel is being resold illegally on the black market at very high prices. In the spring, black market gasoline cost as much as $38 a gallon — far more than most Americans pay at the pump. One company even advertised diesel on social media, with a model walking through a warehouse while Daddy Yankee's song 'Gasolina' played in the background.

The fuel shortage has made daily life extremely hard for ordinary Cubans. A woman named Amarilis Sanchez, 53, waited hours at a bus stop in Havana just to get home from her daughter's birthday party. Taxi drivers across the street could take her, but the price was 1,000 pesos — about 500 times the normal bus fare — because of the high cost of black market fuel. Sanchez, who has no paying job, simply could not afford it and planned to sleep at her daughter's house if no bus arrived.

The Cuban government took a major step in February by allowing private businesses to import fuel for their own use for the first time ever. In June, Cuba passed new laws to let private and foreign companies invest in the energy sector. By late July, nearly 200 Cuban businesses had received permission to buy and sell fuel wholesale to other private companies.

Not everything is working smoothly, though. All U.S. fuel must pass through ports and storage tanks that are owned by the Cuban government and controlled by sanctioned state companies. Private businesses must pay the state about 11 cents per liter just to use these facilities. Large U.S. companies have stayed cautious because the sanctions rules are very complicated.

The average Cuban government worker earns only about $10 a month, so imported fuel is simply too expensive for most of the island's 9 million people. Rolling blackouts — where power goes out for hours — are common. Some lucky areas have generators powered by imported fuel, but the majority of Cubans still go without reliable electricity, buses, or running water.

Experts warn the new fuel system is making inequality even worse on the island. Cuban sociologist Mayra Espina said the small supply of expensive U.S. fuel does not come close to replacing what the embargo takes away. Cuba's president called the embargo a 'genocidal siege,' while the U.S. said it recognizes Cubans' needs but accused officials of mismanaging resources. The future of Cuba's energy sector — and the lives of millions of Cubans — remains deeply uncertain.