CITGO to Begin Discounted Heating Oil Distribution to Poor U.S. Communities

Venezuela's program to distribute discounted heating oil to poor U.S. will begin over the thanksgiving holiday, when the Venezuelan-owned oil company Citgo begins its distribution to communities in Boston and New York.

Caracas, Venezuela, November 18, 2005—The Venezuelan-owned and U.S.-based fuel refiner and distributor Citgo will begin distributing discounted heating oil to poor U.S. communities next week. Rafael Ramirez, Venezuela’s Minister of Energy and Petroleum, made the announcement yesterday, saying that the measure is meant to show Venezuela’s commitment to disadvantaged sectors in the United States.

Venezuela’s President Hugo Chavez had originally announced the measure last August, while the U.S. civil rights activist Jesse Jackson was visiting Venezuela.

The launch of the discounted heating oil program is meant to coincide with the Thanksgiving holiday and will benefit communities in poor communities of Boston, Massachusetts and of the Bronx, New York.

The first phase of the program will begin in Boston and will provide 4.5 million liters (1.2 million gallons) of heating oil at discounted rates, which will mean a savings of approximately $10 million. According to the Venezuelan government, the discounts will be achieved by eliminating middle-men and having Citgo deliver the heating oil directly to the communities. Accordingly, the plan does not involve any losses to Citgo itself.

The logistics of the plan will involve non-profit community organizations, which will help with the selection of beneficiaries, distribution, and billing. Heating oil costs are expected to reach historical heights this year, which means that many poor households might have to go without heat, despite limited state programs to subsidize heating oil for low-income families.

Citgo is a wholly owned subsidiary of Venezuela’s state-owned oil company PDVSA and operates five refineries and licenses 14,000 gas stations throughout the U.S.