Watching the World: Hugo Chavez to the rescue

Nov. 28, 2005
Selected low-income residents of Massachusetts will receive discounted home heating oil this winter under an agreement proposed by Venezuelan President Hugo Chavez.

Selected low-income residents of Massachusetts will receive discounted home heating oil this winter under an agreement proposed by Venezuelan President Hugo Chavez.

He first announced his idea to provide cheap heating oil directly to lower-income Americans while visiting Cuban President Fidel Castro in August.

Since then a plan has evolved to ship 12 million gal of heating oil from Venezuela to Massachusetts at about 40% below market prices via Citgo Petroleum Corp., the US subsidiary of the Venezuelan state-owned oil company. The oil will be distributed by two nonprofit organizations, Citizens Energy Corp. and the Mass Energy Consumer Alliance, over 4 months starting in December.

Screening the poor

The two nonprofits will screen potential recipients for financial need and cooperate with oil distributors that will make discounted deliveries to qualified recipients.

Talks are under way on a similar deal to provide discounted heating oil from Venezuela to low-income residents in New York’s Bronx district.

The agreement signed on Nov. 22 gives Chavez the appearance of being a champion of poor US residents at a time when oil costs are soaring and Congress has-as one observer put it-failed to expand aid in response to rising oil prices.

There can be no doubt of the timeliness of the offer.

The day the agreement was signed, oil prices neared $59/bbl as the early arrival of a winter storm in the Northeast boosted expectations for increased heating oil demand.

Crude futures saw a second day of gains after sliding to 5-month lows the previous week, though prices are still about 20% above year-ago levels. The price of light, sweet crude for January delivery gained $1.05 to $58.75/bbl on the New York Mercantile Exchange.

Other NYMEX prices also advanced, with heating oil in particular rising by 3.1¢/gal to $1.740/gal.

Political gesture?

In the face of advancing prices, one can easily imagine the feelings of people in need of cheaper supplies. One can also imagine Chavez rubbing his hands with delight and not to keep them warm.

As one of the world’s fiercest critics of the administration of US President George W. Bush, Chavez is doubtlessly feeling gleeful at the political capital he can reap from this deal.

Others don’t see it that way.

US Rep. William Delahunt (D-Mass.) met with Chavez in August and helped broker the deal. He said his constituents’ needs for heating assistance trump any political points the Chavez administration can score.

“This is a humanitarian gesture,” Delahunt said, speaking after a news conference with Venezuelan officials outside the home of a constituent who will receive heating aid.

“This is a gesture about people,” he said, adding, “It has nothing to do, as far as I’m concerned, with anything between the Bush administration and the Chavez administration.”

Yes, and we all believe in Santa Claus, too.