Venezuelan oil subsidies to Cuba rose to $3.4 billion in 2006 and may top $4 billion this year, as the Caribbean nation's reliance on aid from ally Hugo Chavez intensified, according to a University of Miami study.
Cuba's dependence on Venezuelan oil is beginning to mirror its relationship with the Soviet Union in the 1970s and 1980s, Jorge Pinon, senior research associate at the university's Institute for Cuban and Cuban-American Studies, wrote in the report released today.
``This clearly reflects the extent of the economic dependence by Cuba on Venezuela's current regime and at the same time the commitment of Hugo Chavez to support the Cuban government,'' he wrote in the report.
State-owned Petroleos de Venezuela SA yesterday began searching for light oil off the coast of Cuba, another sign of strengthening economic ties between the government's of Venezuelan President Chavez and Cuba's Castro, both harsh critics of the United States.
The study extrapolated the value of oil subsidies to Cuba using market values. Cuba is probably not paying for imports of crude oil and refined products with hard currency, representing a significant loss of revenue for Venezuela, according to the report.
source:bloomberg.com
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