Dollarization of Cuba's Fuel Market: A New Era

Cuba announced that high octane gasoline will only be available in dollars due to U.S. sanctions and difficulties on the international market. This decision is part of a broader trend of dollarization and impacts residents who earn in pesos. Economic constraints have been intensified by external factors and internal inefficiencies.

High octane gasoline in Cuba will now only be available for purchase in dollars, the government revealed on Wednesday. This marks another step towards the dollarization of the communist country's economy.

Irenaldo Perez, deputy director of Cuba's state oil and gas monopoly, cited U.S. sanctions as the primary reason for the decision, noting the challenges faced in securing high octane fuel internationally. Consequently, state vehicles will transition to using regular gasoline.

This shift means Cuba will, for the first time, offer a basic commodity exclusively for dollars, a move that could affect professionals with peso-based incomes. The country has struggled with diminished foreign income and blames the U.S. embargo and COVID-19 pandemic for its economic woes, compounded by internal inefficiencies.