Electricity in Cuba: Black Market Prices or Subsidized?

By Osmel Ramirez Alvarez

Crowd waits to pay their electric bill in Mayari, Holguin.  Photo: Osmel Ramirez

HAVANA TIMES — On Saturday April 15th, I went to pay my electric bill at the place dedicated to this end here in Mayari, Holguin, as I was running out of time to meet the deadline. As the day beforehand had been Good Friday and a national holiday, the place was a lot busier than normal: the line was hell!

I got there at 8:30 AM and at 11 AM it closed, and I couldn’t pay my bill. I had to go back on Monday and it was worse: I had to wait all morning in the line until I just managed to pay it in the last few minutes before it closed. The people who got there first had arrived in the early morning hours.

There are two desks where you can pay but only one is usually open, while people pack the place outside, losing precious hours of work or doing anything more productive rather than waiting around because of a company’s inefficiency. No country in the world can make progress with such practices.

It’s true that the collector-meter reader comes to visit you at your home and you can pay them there and then; and that you have 10 days to pay it at the payment office. However, the line is never-ending every day because every collection route has its deadline on a different day; that’s to say, every day there are people who are being threatened that their electricity will be shut off.

Getting the money to pay for the bill is an odyssey in itself, which is another reality. I myself am far from having the income I need to just support my family with a decent living and I earn more than the average. Here, if you are very poor, you live with less than a USD a day.

Up until some years ago, electricity had a price that was in keeping with our salary (9 cents per kW-Hz); but for some years now, due to an initiative led by our undefeated Commander in Chief, prices were hiked and only the first 100 kW-Hz cost 9 cents. From then onwards, it can cost up to 5 pesos, when you use more than 5000 Kw-Hz.

Any home in Cuba consumes about or more than 300 kW-Hz, because here cooking food with electricity has become a widespread practice, which was also one of Fidel’s initiatives. Having air conditioning on at home is a luxury that only those who earn more than 20 minimum salaries a month can afford. Imagine that 100 kW-Hz costs 9 pesos, but 200, just the double, costs 44 pesos; that is to say it’s almost 5 times more. And 300 kW-Hz cost 114 pesos, if you triple consumption, prices are 11 times more. And if is was 500 kW-Hz, five times the initial consumption, the price goes up over 22 times. And so on, always on the up.

This policy was established so as to encourage saving electricity; but it is rather draconian, abusive and thieving, because it is stealing the Cuban people’s already poor incomes with an undeniable basic service; a people who work for the same boss who sells them the electricity and pays them really badly, a semi-slave wage, which isn’t in keeping with the price this service sells for.

There was a woman next to me in line, an office worker, who only earns 340 pesos (17 USD) per month; a single mother of two children, with only the most basic home appliances and she paid 106 pesos, which is over 30% of her salary. I myself paid 123 pesos and my parents, who only receive a pensioner’s check for 225 pesos, paid 46 pesos; because they are forever saving, switching off their fridge, sitting in the shadows at night and cooking everything at one go in the day. It’s sad.

And it would all be silliness if the rest of our income sufficed to pay for something else, but everything else is even more expensive than electricity. Eduardo Chivas would be turning in his grave if he saw such abuse being promoted by one of his students; the man who fought so much against injustices of this kind and passed down his motto: “we promise not to steal”.

The Government tells us that electricity is “subsidized”, in conformance with their calculations which are made in USD, but the effect it has on our pockets is as if it were the “black market”. It’s already become common practice to calculate the services we receive in USD and to compare the price at 25 pesos x 1 USD, to highlight the State’s generosity they compare these prices with those in New York and London. However, these calculations are misleading because there people pay 20 times more for their electricity than Cubans do, but they earn 125 times more than us. The numbers speak for themselves.

Public pay telephones.  Photo: Juan Suarez

A mean political ruse: I remember the commotion Fidel caused in Argentina when he said in a speech, I think it was at a university, that in Cuba you could buy 125 liters of milk with a dollar. He was telling the truth and lying at the same time, because nobody can buy even 2 liters of milk for 25 cents; just a liter if you have a child under the age of 7; after that, goodbye breakfast or you have to pay for it at a hard-currency store, which sells for the equivalent of 15 pesos a liter, which we parents earn in about 8 hours of work on average.

The case of electricity, milk and almost everything that surrounds us serves as examples of the widespread madness here in Cuba; and of how unjust the social system is which was conceived as a model of social justice, but went mistaken in its ways. It’s dysfunctional; I don’t get tired of saying it.

How can the private sector grow with such a high burden of electricity? There is no distinction between types of customers (non-governmental-industrial, or other businesses which logically consume more), like in the rest of the world.

However, in spite of robbing us, in spite of these abusive prices, we are also forced to wait in never-ending lines to pay for it, at the risk of losing such a crucial service. Anyway, their capacity to make us suffer is infinite and as Raul so aptly puts it, we have to “endure, endure, endure.”

  • N.J. Marti

    It does not need to be like this at all. The electric company needs to be run as stand alone operation giving it the freedom to invest in diversified energy sources.

    • pipefitter

      Osmel, I know the Mayari area very well and it seems to me that you are not telling the complete story. You know that in Felton the power plant produces electricity with petroleum and that is one of the most expensive ways to produce it. Cuba buys most of it,s petroleum on the open market and has to pay market prices for it. I know that it costs about $0.1895 to produce one KWH of electricity with petroleum. So Cuba is subsidizing your electricity if you are paying $0.09 per KWH. What everyone needs to do is install LED light bulbs from china. An A19 or standard base light bulb with an output of a 60w equivalent incondescent bulb only consumes 9watts and gives excelent light. They are long lasting (25 years) and are sold in China for $0.56 each when bought in 1000 lots. This will reduce electricity consumption in a big way. buy an induction hotplate for cooking, they use a lot less energy or cook with propane.

  • Carlyle MacDuff

    Sources tell me that the regime is increasingly concerned about some of the bici-taxis converting to being electrically powered. Unlike the electric scooters and the electric Minerva bicycles which have been imported and sold by the regime at very high mark-ups, they have had no such compensatory benefit from those inventive bici-taxi owners. So watch out for some sort of additional licence charge being made! Initiative has no place in a communist state as it represents individuality.
    Pipefitter suggests purchasing various devices to reduce consumption – but where does a Cuban family obtain the funds to do so?