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. Last Updated: 07/27/2016

Chavez to Subsidize Oil for Boston's Poor

CARACAS, Venezuela -- Venezuelan President Hugo Chavez has begun a program of discounted heating fuel sales for low-income customers in Boston, following up on promises to help the poor throughout the Americas.

The fuel will be sold for 60 cents to 80 cents less than prevailing retail prices, according to Felix Rodriguez, president of Citgo Petroleum, the U.S. refining and marketing business owned by Venezuela's state oil company. Citgo will sell 12 million gallons of fuel through two nonprofit groups, he said.

"Oil companies have to help people," Rodriguez said at a ceremony in Boston that was carried on state television in Caracas. "Business isn't our only issue."

With these sales, Chavez is jumping into a debate that has raged in Washington over what oil companies and the government should do to help consumers hurt by record fuel prices. Chiefs of the biggest U.S. oil companies were asked earlier this month at a Senate hearing to justify their record earnings, and lawmakers have said oil profits should go to fund home heating aid.

Chavez, who led the opposition to the free trade agreement that U.S. President George W. Bush offered at a summit in Argentina this month, pledged in August to help Americans cope with rising energy costs. "We want to help the poorest communities in the U.S.," Chavez said. "There are people who die from the cold in winter in the U.S."

Citgo is working with U.S. Representatives Edward Markey and Bill Delahunt, Democrats from the Boston area. Citgo is planning a similar program to sell 8 million gallons in New York, Representative Jose Serrano, a Democrat, said in a statement. The Northeast accounts for about 80 percent of U.S. heating oil consumption.

Senator Byron Dorgan, a North Dakota Democrat, has sponsored a bill that would tax profits when oil is above $40 per barrel and rebate the money to taxpayers. The Senate rejected the measure last week 64-35.Senator Charles Grassley, an Iowa Republican, has asked oil companies to donate 10 percent of their profits to help families pay heating bills.

The total value of the discounts Citgo is offering in Boston may reach $14 million, Rodriguez said. Up to 40,000 households will receive help.

The planned Citgo sales in Boston and New York do not yet come up to the pledge Chavez made in August to offer poor people in the U.S. 66,000 barrels, or 2.8 million gallons, of heating oil per day. Citgo may expand its program, according to a statement from the company.

Sales of 66,000 barrels per day would represent about 10 percent of the refinery capacity that Citgo controls in the United States, Venezuelan Oil Minister Rafael Ramirez said in August.

The wholesale price of heating oil in Boston on Tuesday was up 19 percent from a year ago, according to data compiled by Bloomberg. The average U.S. household this winter will spend 27 percent more for heating oil than it did last winter, the U.S. Energy Department said in a Nov. 8 forecast.