Venezuela Ends Heating Oil Program to U.S. Poor Due to Budget
For the past three years, Venezuela’s state oil company has provided heating oil to low-income households in the U.S. through it’s subsidiary, Citgo Petroleum. Venezuelan leader, Hugo Chavez, began this program after meeting with the Reverend Jesse Jackson a few years ago. For Chavez, the program was a chance to tweak the U.S. government, with which he is constantly at odds.
However, with the dramatically lower price of oil, Venezuela is no longer able to afford these subsidies and has announced it will be ending the program. And while Chavez relies heavily on payments to the poor in order to maintain his legitimacy, once oil fell below $90 per barrel, Venezuela’s budget became unsustainable. Naturally, foreign subsidies like this program are the first to be cut. Whether he has the money, or not, Chavez cannot afford to allow his massive domestic subsidies to wither– which is a fundamental reason why he has so strongly supported OPEC’s efforts to increase the price of oil.
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