Venezuela to keep sending free fuel to United States poor

By Ian James
Caracas, Venezuela (AP) 1-09

President Hugo Chavez will keep donating heating oil for poor American families in a costly decision that suggests the Venezuelan leader wants to keep to his pledges – and buttress his image – in spite of falling oil prices.

Venezuela’s Citgo Petroleum Corp. announced the aid program would continue on Wednesday, just two days after its partner nonprofit group, Boston-based Citizens Energy, said Citgo had halted the free fuel shipments due to the world economic crisis.

“Chavez decided that it was a mistake,” said Larry Birns, director of the Washington-based Council on Hemispheric Affairs. He said Citgo officials probably recommended the cost-saving measure to Chavez in the first place, but the impact may not have sunk in until the president saw the reaction.

He then “began to understand that the cutbacks of the U.S. program were very damaging in terms of image,” Birns said.

Donating oil to low-income people in the United States may not seem an image-booster for a president whose core support is among Venezuela’s poor and working class.

 

But Birns and other analysts say Chavez wants to show he’s keeping to commitments, even in the face of falling oil earnings that are cutting into government revenues. The president is facing a key vote as early as Feb. 15 on abolishing term limits, and his moves beforehand are expected to be carefully weighed with an eye to his support.

Chavez’s 4-year-old heating oil program in the U.S. has allowed him to needle President George W. Bush’s government on its home turf.

But some say his latest decision reflects a desire to show solidarity with the poor, and also to show he’s a man who sticks to his pledges.

“I’d guess that for the president ... what matters to him is keeping his word, keeping his promise to keep helping the needy,” even though Americans face less of a burden now due to lower fuel costs, said Mazhar al-Shereidah, an oil economist at Venezuela’s Central University in Caracas.

For Chavez, such motivations seem to matter more than the economic calculations – even though oil prices have fallen 67 percent since their July peak, and his government is facing leaner times.

“He’s torn between being the visionary socialist Paul Bunyan and at the same time someone who has some capacity for prudence in terms of evaluating what kinds of burdens his economy can bear,” Birns said.

Citgo Chief Executive Alejandro Granado said in Boston on Wednesday that Citgo had found a way to continue paying for oil shipments.

“This is a big effort,” Granado said. “This is a sacrifice.”

Citgo, the U.S.-based subsidiary of Venezuela’s state oil company, said it had been forced to evaluate all of its social programs due to the falling crude prices.

Former U.S. Rep. Joseph Kennedy, who heads Citizens Energy, said Chavez intervened directly to continue the program, which provides fuel to 200,000 households in 23 states and 65 Native American tribes. His group said Citgo donated $100 million worth of heating oil last year.

Granado said he spoke with Chavez Wednesday morning to update him. “He said, ‘OK. Continue,” Granado said.

Chavez has used billions of dollars in oil income in recent years for international aid, while promoting his vision of a united Latin America independent of the United States.

Some are now predicting a drastic pullback in Chavez’s aid, though where or when the cuts may come remains unclear.

Venezuela also ships fuel under highly favorable lending terms to countries across the Caribbean and Central America. Oil Minister Rafael Ramirez says that program, called Petrocaribe, will continue.

 

 

 

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