Cuba: Recapping Prices Without Saying They’re Being Capped
HAVANA TIMES – Finally, on Wednesday, after three days of searching, Camagüey resident Yuliet Boza managed to find cooking oil. It was thanks to a neighbor who gave her the address of a house being used as a warehouse where they were still selling it, “although they keep it out of sight because of the inspectors,” she explained. As Yuliet expected, when she arrived she learned that the price per liter had risen to 3,700 pesos (US $5.50) 500 pesos more than the last time she had bought it, a week earlier. Even so, she did not hesitate to rummage through her purse to scrape together every last cent so she could buy three liters.
“And if you had called me, I would have given you more money. The way things are going, by September it will cost twice as much,” her daughter lamented when Yuliet returned home.
It was not reasoning rooted in pessimism, but in the starkest objectivity. Although the price of cooking oil had been rising since the beginning of the year, it was during the last two months that the trend accelerated into the episode of madness Cubans are currently enduring. At the beginning of June, a liter sold for between 1,500 and 2,000 pesos, depending on the province and occasional supply disruptions. But at the time of writing, it was already selling for more than 6,000 pesos in the eastern provinces and between 3,500 and 5,000 pesos in the rest of the country.
The regional differences are due to the distance from Mariel, the port that receives 80% of Cuba’s imports. Transporting each container from that western port to Guantanamo, at the eastern end of the island, costs around 5 million pesos, almost three times as much as a year ago.
From Wishes to Reality
Guantanamo is considered the poorest province in the country because of its population’s low incomes and its lack of industry and agricultural development. Any inflationary process has far more dramatic consequences there, especially when its effects are concentrated on basic necessities. That is why no one was surprised that the authorities in that province were the first to feel compelled to act against the relentless rise in prices. Nor was it surprising that they did so by imposing price caps, precisely the measure that President Miguel Díaz-Canel had dismissed a month and a half earlier because of its “limited effectiveness and the distortions it generates.”
The president made that observation during the same speech in which he presented the package of 176 measures with which his administration hopes to pull the Cuban economy out of its worst crisis in more than half a century. In the days that followed, the media and government propagandists insisted on two messages: that price caps would not be imposed again and that the economic reform would very soon begin to bear fruit. At least the first of those claims has already been called into question.
To save face, neither in Guantanamo nor in the other provinces that have decided to intervene in the markets do officials now speak of “price caps.” Instead, they use the term “reference prices,” which in practice means the same thing, only in different words.
This is not the first time Cuba has resorted to such semantic acrobatics. Recent history is full of episodes in which the use of Orwellian-style “Newspeak” has dominated official discourse. To avoid calling economic reforms by that name—which could be interpreted as the beginning of a hypothetical transition—terms such as Updating the Economic Model, the Ordering Task, and the Program to Correct Distortions and Revitalize the Economy have been used. Financial restrictions on bank withdrawals and forcing digital payments were branded as “Bancarizacion”; layoffs of state workers have been described as “worker availability”; and poor people are not described as poor, but as “people in vulnerable conditions.”
Beyond the bureaucratic terminology, what this reversal on prices has demonstrated is that the Cuban government has practically no room left to maneuver in overcoming the crisis. And, in the opinion of prominent economist Pedro Monreal, it also shows that Havana’s top leaders still fail to understand that the economy must be managed on the basis of objective conditions, not wishes.
So far, the 176 measures have achieved only one thing: proving that they learned nothing, Monreal wrote on social media earlier this week. “Liberalization was carried out without first reducing the structural rigidity of supply, stemming from depressed domestic production and shortages of inputs and foreign currency. The predictable result was an inflationary spike with devastating effects on citizens’ well-being that forced a reversal, reproducing the same cycle observed since 2021.”
For ordinary Cubans, Monreal’s academic assessment translates into a fact as simple as it is undeniable: “people have lost respect for money.”
That is what I heard a Camagüey resident say on Monday as he searched for chicken “at whatever price.” Unlike Guantanamo, authorities in Camagüey and other provinces opted not to cap prices. Instead, they decided to launch inspection campaigns aimed at achieving the same result: keeping prices at levels “affordable” to the population. But those efforts have also failed spectacularly. Rather than sell at lower prices, private business owners have chosen to close their businesses or remove “problematic” products (oil, chicken…) from their shelves and sell them under the table, or hold onto them in the hope that their prices will continue to rise.
The outlook works in their favor. In June, around the same time the Cuban government ordered an increase in the extremely low state salaries and pensions, the White House issued a new package of measures against the island. Among its directives, one stands out: shipping companies from third countries were threatened with being barred from US ports if they continued transporting goods to Mariel. All of them canceled those operations.
As an immediate consequence, thousands of containers have been stranded in countries such as Panama and the Dominican Republic, many of them containing food and basic necessities. The only option left by the Trump administration is for those shipments to be sent to a US port and, from there, forwarded to Cuba, with the resulting increase in logistical costs and customs obligations.
“It is hardly surprising that oil costs what it does, or that the prices of other products continue to rise. Sanctions on shipping companies and ports obviously affect the supply chain. Add to that the energy blockade, which makes it difficult to keep frozen products refrigerated, to the point that many merchants have stopped importing them. Trapped in these waters, our private business sector is drowning,” Alfonso Larrea Barroso, a well-known Cuban entrepreneur, wrote a few days ago.
Even middle- and higher-income sectors, such as those receiving the largest volumes of remittances from abroad, are already feeling the weight of inflation. The peso’s exchange rate against currencies such as the dollar and euro provides quantifiable evidence of this phenomenon. After several weeks with virtually no changes, the value of foreign currencies has begun to experience a slight decline in recent days. A currency trader consulted for this article predicted that the trend could continue in the immediate future, “because with the situation the way it is, more people are selling the dollars they had saved. A large portion of remittance money is no longer being saved; it is being used for day-to-day expenses.”
For Yuliet, who lives with her husband, daughter, and son-in-law, all adults with steady salaries, cooking has become a daily odyssey. “I can’t even imagine how families with children, elderly people, or people with disabilities manage. We are barely surviving. In fact, I don’t know whether the next time I need oil I’ll have enough money to buy it. Or even whether I’ll be able to find any.”