Cubans face soaring fuel prices as Canadian tourists swoop in for winter getaways

Whatever the weather in Cuba this February, people may be feeling gloomy about thecost of living.

The Cuban government is set to raise fuel prices fivefold at the start of next month.Havana says the move is a must, as it seeks funds to trim its deficit spending and buy needed goods from abroad.

The change is not expected to have much of an immediate impact on the costs of vacation packages for Canadians looking to get away to the popular Caribbean destination, but thosetravelling to Cuba's cities and towns might see the effects thatthe fuel hike and the country's ongoing economic crisis are having on Cubans.

Life is alreadyhard for manyas Cuba grapples with the economic crisis, food and medicine shortages, and inflation that economy minister Alejandro Gil pegged at 30 per cent at year's end. The pending jump at the pumps is yet another stress, as thecost of filling up a 40-litre tank with a popular gasoline blend will soon exceed the average monthly state salary.

"It's a considerable hike and I think it's going to be hard for us afterwards," said Javier Ernesto, a 33-year-old cab driver,who spoke to Reuters while waiting to fill up his carin Havana this week.

"People have the right to complain, especially when wages are not growing at the same rate," said Ricardo Torres Prez, a Cuban economist and faculty fellow in the department of economics at American University in Washington, D.C.

The fuel hike comes during a peak season for tourism, as winter-weary Canadians look to escape the cold.

Sun is an obviouspart of Cuba'sappeal, but so is price.

"Cuba offers what Canadians want," said Torres Prez, noting that in addition to being an inexpensive place to visit, it's also a relatively short flight for some Canadian sun-seekers.

Moreover, deals can be found onlinefor Canadian travellers, flying out of Toronto, to spend a week at a Cuban hotel during the month of Februaryfor less than $1,000 per person.

"That is incredibly inexpensive," said Rachel Dodds, a professor of hospitality and tourism managementat Toronto Metropolitan University (TMU), saying that Cuba has historically been promoted and marketed "as the cheap place to go."

A need for dollars

Cuba is in need of foreign currencyso it canimport food, medicine, fuels and other necessities, amid what's been called the worst economic crisis in decades.

This has been exacerbated by the decades-long U.S. trade embargo, which outlaws American companies from doing business with Cuban interests and prohibits most Americans from travelling to Cuba.

The sale of fuel is one avenue for the governmentto collect that foreign currency, whetherfrom tourists, private businesses or Cubans with access to U.S.dollars via remittances from relatives abroad.

To that end, the government is opening more than two dozen service stations that will only accept U.S.dollars for fuel.

Pedro Ducasse, a 28-year-old physician from Havana, gets paid in pesos. He's concerned that a setup where people with access to foreign currencycan get what they need maycreate its own inequalities.

"I'm not against the rise in prices but the issue is that there should be fuel available for everyone," Ducasse told Reuters.

Tourists, on the other hand, can usethe dollars in their wallet to buy gas for their rented cars.

How much dollar-centric revenue Havana can generate remains to be seen especially with Cubastill seeing far fewer visitors than before the pandemic.

More than one million peopleheaded to Cuba from Canadaannuallyin the pre-pandemic era. Global Affairs Canada says Cuban authorities reported more than 700,000 arrivedfrom Canadabetween January and September of last year.

Torres PrezsaidCanadians visiting Cuba's cities and townswill see what the people who live there are struggling with as individuals and as a wider society amid the ongoing economic crisis. Noticeable issues with garbage collection in cities like Havana are one such example, he said.

Ottawaadvisestravellersto "exercise a high degree of caution" in Cubadue to shortages of key necessities.

Canadians key for Cuba

Despite the coming changesto fuel prices, Torres Prez does not expect the price of holiday packages to shift dramatically in part because they are priced in currencies that aren't depreciating like the Cuban peso is.

He saidthe Canadian marketis very important for Cuba and thegovernment willlikely want to protect it.

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Although the largest Canadian airports are back to their pre-pandemic 2019 levels of activity, the number of seats on domestic flights have decreased by 25 per cent thanks to seat and route cuts by the airlines.

Canadian airline and tourism operators signalled that changing costs are a part of being in the travel business.

An Air Transatspokesperson said the increase to fuel pricesin Cuba is expected to have "a minimal impact on our airline and tour operator as it applies to gasoline and diesel."

Air Canada said it's "accustomed to managing fluctuating fuel prices around the globe and mitigating the impact."The airline further saidits Cuba-bound planes are typically loaded with "more fuel than required to minimize the amount of fuel loaded onto the aircraft at the destination," for both cost and supply reasons.

But even if Canadian visitors to Cuban resortswere to see marginal price increases for food, drink andservices while visiting the island, Doddssaid they should remind themselvesof their fortune to be on vacation as the people who live in the country struggle to afford basic necessities.

"If we can afford to go on holidays, we are very, very privileged in the first place," she said.