Chavez embarrasses Bush with cheap fuel for US poor
By Alec Russell in Washington
Venezuela's president, Hugo Chavez, has pulled off his greatest public relations coup yet in his campaign to irritate the Bush administration with a deal to supply cheap fuel to thousands of poor residents of Boston and New York.
To the annoyance of many in Washington, Citgo Petroleum Corporation, a company controlled by the Venezuelan government, is to supply more than 12 million gallons of heating oil at 40 per cent below market prices.
The deal is one of the most high-profile moves yet in Mr Chavez's bid to market his "21st-century socialism" using his country's oil wealth.
While it will not change many minds in Washington about his populist and autocratic regime, the government in Caracas hopes that it will help to stake out Mr Chavez's claim as the coming leader of an anti-capitalist Latin America.
Mr Chavez, who once dubbed President George W Bush a "genocidal madman" and led a huge anti-American protest earlier this month, first proposed his fuel offer in August when oil prices were at a record high after Hurricane Katrina.
Since then prices have dropped a little but there is still widespread public concern in America over the anticipated cost of heating bills this winter.
Joe Kennedy, the chairman of Citizens Energy, one of the organisations that will distribute the oil, said the deal highlighted the failure of oil companies in the US and the government to step in to help.
"Our federal government has made billions and billions of dollars just this year on the royalty payments the oil companies pay to the government," he said.
But when it is a question of poor Americans, he said, "What do we hear from Washington? Sorry boys. There's no money in the till."
In Washington, however, where Mr Chavez is excoriated for his support for Fidel Castro, the Cuban dictator, regional experts suggested that the deal was more about politics than economics.
"This will have limited practical impact," said Eric Farnsworth, the vice-president of the Council of the Americas, and a former adviser to Bill Clinton on Latin America. "Massachusetts is not exactly out of the market economy, they can procure all the energy they need. This is, however, consistent with what Venezuela is trying to achieve."
To promote his image and his dream, Mr Chavez has offered cheap oil and refineries to his neighbours and pledged financial support for regional development programmes. All the while he has positioned himself as a rival to Washington, accusing the Bush administration of plotting a coup against him, and predicting the imminent demise of American capitalism.
He burnished his profile at a regional leaders earlier this month when he led opposition to a US-backed plan for a regional trading bloc, but significantly no major figure signed up to support his alternative vision.
America currently gets about 10 per cent of its oil from Venezuela.
The deal came against a background of bubbling tensions over Spain's moves to sell aircraft and naval ships worth more than £1 billion to Venezuela. The US ambassador to Madrid said yesterday that America might block the deal.