US fuel exports to Cuban businesses fuel black market, widen inequality

A narrow exception to Washington's long-standing oil embargo has allowed U.S. companies to ship fuel to private businesses in Cuba, a development that is reshaping the island's tightly controlled energy landscape. Between February and May, approximately 900,000 barrels of U.S. fuel arrived, a volume sufficient to meet the country's energy needs for only about nine days but enough to spark significant change.

This fuel, intended for private restaurants, retailers, and taxi services, has also found its way onto a thriving black market. In Havana, gasoline has been sold from cramped apartments and advertised on social media platforms like Facebook and WhatsApp. Prices on this market have been steep, peaking at $10 per liter (about $38 per gallon) in the spring before easing as import volumes grew. For many Cubans, these prices are unattainable. With an average government salary of roughly $10 a month, imported fuel remains out of reach for the vast majority of the island's nine million residents.

The influx of fuel has provided some relief, powering home generators during rolling blackouts and helping to mitigate the collapse of public transport. However, it has also sharpened existing wealth disparities. In one instance, a woman waiting for a bus that costs 2 pesos was quoted a taxi fare of 1,000 pesos, a price driven by the black market cost of fuel. For those without a steady income, such a fare is simply impossible.

The Cuban government, seeking to avoid paralysis from the oil blockade, authorized private businesses to import fuel for their own use in February. This was followed in June by a broader package of economic reforms aimed at opening the energy sector to private and foreign investment. By late July, nearly 200 Cuban businesses had received permission to distribute fuel wholesale to other private companies. The government has also approved the first foreign investment venture dedicated to fuel import and sale, though the company involved has not been identified.

Despite these reforms, the state still controls key infrastructure. U.S. fuel destined for private buyers must pass through state-owned ports and storage tanks. While some state-operated gas stations now hold U.S. fuel, they can only disburse it to vehicles registered to specific private businesses. Retail sales to the general public have not yet been approved.

The situation presents a compliance challenge. Fuel sold on the black market violates Cuban law and also poses a risk under U.S. export rules, which mandate that the fuel be used only by the private sector and not end up in government hands. Experts note there is little monitoring to ensure these restrictions are followed. The U.S. State Department has acknowledged the significant humanitarian needs of Cubans but has not commented on the impact of its policies on the black market or high prices. Cuban authorities have denounced what they call a "genocidal siege" by Washington, vowing there will be no massive privatization of national assets.