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Massive fire threatens to aggravate economic crisis in Cuba

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As of Tuesday, state media said four of the eight fuel storage tanks, each with a capacity of 300,000 barrels, were on fire.

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The fire, which the Government attributed to a lightning strike on Friday, has cast a black cloud over northern Cuba and paralyzed work at the Matanzas industrial complex, the country’s only crude oil transshipment point and the only facility capable of to receive 100,000-ton tankers.

The disaster is likely to delay economic recovery, exacerbate the island’s electricity problems and exacerbate fuel shortages. Before the fire, the UN Economic Commission for Latin America and the Caribbean forecast economic growth for Cuba in 2022 of 3.4%, its first year of strong growth after the contractions of 2019 and 2020.

The Matanzas complex, on Cuba’s north coast, some 90 kilometers east of Havana, is a key piece of the island’s energy backbone, receiving fuel from Venezuela and Europe and sending it to smaller terminals. throughout the island. It also supplies fuel to some of the island’s thermoelectric generators.

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In addition, it is also the only entry point for the national production of crude estimated at 40,000 barrels per day, said Jorge Piñon, director of the Energy Program for Latin America and the Caribbean at the University of Texas at Austin.

Critical port facilities in Matanzas do not appear to have been affected, he said. But with the fire still burning, the true extent of the damage is unclear.

Even storage tanks that haven’t been directly affected could be damaged by high temperatures and rendered unusable, Piñon said. It will be a month or so before we know how bad the damage is.

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The fire is putting additional pressure on the already critical situation of the power grid. For months, Cuba has been suffering from blackouts, as aging power plants have had to shut down and fuel costs have soared. On Monday, a major power plant was offline because a water pumping station in Matanzas was damaged.

Officials said they hope to get it back online soon, but even so, the country will only be able to supply about two-thirds of peak demand on Tuesday, the Ministry of Energy and Mines said.

Annual inflation on the communist island reached 29% in June, largely driven by the devaluation of the peso and rising costs for fuel and other imports.

Cuban, Mexican and Venezuelan firefighters have been trying to contain the fire that has left at least one dead, 125 injured and more than a dozen missing.

Source: Gestion

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