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Hot
Summer Saps Cuba's Energy
Patricia Grogg
HAVANA, (IPS) - The high temperatures
and scorching sun beating down on Cuba
these days are jeopardising the
government's energy savings plans, aimed
at reducing fuel imports at a time of
continued economic difficulties
aggravated by a poor sugar harvest.
''The hotter it is, the more is spent on
electricity, because fans and air
conditioning units run constantly. That
is normal at this time of year,'' the
start of summer, a researcher familiar
with the energy sector told IPS.
Shelling out scarce foreign exchange for
fuel imports continues to be one of
Cuba's biggest financial challenges,
despite the fact that most of the
electricity used on this Caribbean
island nation is generated by locally
produced oil.
That problem has been compounded by the
small sugar harvest, which ended this
week.
Diplomats speculate that the fact that
the government has not yet announced the
size of this year's yield confirms the
projections of experts who believe the
harvest stands at between 2.1 million
and 2.2 million tons, far from the
already low 2.7 million tons predicted
by the government.
If that is true, the country could lose
around 180 million dollars in revenues
due to the shortfall in sugar exports,
the analyst, who preferred not to be
named, told IPS.
The country's main sources of foreign
exchange are tourism, the sugar industry
and expatriate remittances from Cubans
living abroad.
Cuba continues to feel the effect of
financial troubles caused by the drop in
tourism triggered by the Sep. 11, 2001
terrorist attacks on New York and
Washington, which had a heavy impact on
global air travel flows and tourism.
In addition, three hurricanes in the
past two years caused over two billion
dollars in losses.
The socialist government of Fidel Castro
was forced by high oil prices and the
country's weak financial situation to
implement a series of measures since the
second half of 2002 aimed at reducing
energy consumption and imports.
The programme, which according to
official estimates could lead to nearly
400 million dollars in savings in a
single fiscal year, includes
restrictions on electricity use by
companies not directly involved in
production or trade.
In addition, the surface area planted in
crops using irrigation systems that run
on locally-produced electricity rather
than imported diesel fuel, which is
needed to keep the mass transit systems
running, was increased.
Crops are irrigated in the early hours
of the morning, in order to avoid
competing with electricity use in
residential areas, which consume around
half of all energy on the island.
Fuel shortages have contributed to
reducing collective transport in urban
areas to half of the normal capacity.
As part of a longer-term strategy, the
government set up the Renewable Energy
Front (FRE) in October 2002, to promote
the use of alternative sources like
wind, solar and photovoltaic energy.
Under that project, all central
administration entities must include an
allotment of resources for the
development of renewable energy sources
in their 2004 budget plans.
Experts say the renewable energy plan
will not only help the country deal with
the burden of high oil prices, but will
also increase the use of alternative
energy sources, in line with the
commitment assumed by Latin America at
the World Summit on Sustainable
Development, held last year in
Johannesburg, South Africa.
According to official statistics, this
Caribbean island nation of 11.2 million
consumes around eight million tons of
oil a year, five million less than what
it received from the Soviet Union until
it fell apart in 1991.
In 2002, Cuba produced 4.1 million tons
of oil and natural gas, which generated
around 90 percent of the electricity
consumed on the island, and covered all
of the country's cement production and
nearly 20 percent of demand for refined
crude.
The remaining 50 percent of national
consumption is covered by imports from
Venezuela and other markets.
But since last year, Venezuela's
political crisis has had a strong impact
on the agreement through which that
country sells Cuba 53,000 barrels a day
of crude and derivatives, including
diesel and airplane fuel and gasoline.
Under the bilateral agreement, Cuba pays
for 80 percent of the fuel shipments
from Venezuela at market price within 90
days of delivery, while the remaining 20
percent are payable within 15 years,
with a two-year grace period, at two
percent annual interest.
However, the oil shipments were cut off
twice in the past 14 months.
The first time was due to the frustrated
coup d'etat in which Venezuelan
President Hugo Chávez was overthrown
for two days in April 2002.
The second was caused by the
December-January general strike called
by Venezuela's main business association
and trade union, as well as managers of
the state-owned oil industry, in another
unsuccessful attempt to topple Chávez.
The interruptions of deliveries by PDVSA,
the Venezuelan oil company, ''caused us
hundreds of millions of dollars in
economic damages from April 2002 to
date,'' a Cuban Foreign Ministry
spokesman complained on Jun. 9.
The suspensions of deliveries led to an
accumulation of Cuba's debt to
Venezuela, which the two countries have
had to renegotiate in order to renew the
agreement in effect since 2000, which
was criticised from the start by anti-Chávez
sectors.
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