Venezuela's Chavez shuts off free oil program for U.S.

McClatchy NewspapersJanuary 5, 2009 

CARACAS — Venezuela's state oil company is suspending a much-promoted program that provided free heating oil to hundreds of thousands of poor people throughout the U.S., the company announced Monday.

The program has been a public relations bonanza for Venezuelan President Hugo Chavez, a socialist who frequently attacks capitalism and the U.S. Chavez repeatedly has tweaked the noses of U.S. policy makers by saying the program shows that he's a good friend of America's poor.

Venezuela is halting the program at least temporarily because the sharp drop in oil prices is forcing the country to reduce government spending, the firm said in a statement from Citizens Energy Corp., a Boston-based nonprofit that's managed the program in the U.S.

Monday's announcement was among the first of many measures that are expected in the coming months as Chavez's oil-dependent government tries to eliminate programs that don't benefit Venezuela's poor, following a global price drop from $147 a barrel in July to $48 now.

"Venezuelan government officials would rather cut social programs abroad — such as in the United States, Ecuador and Nicaragua — than affect social programs in Venezuela," said Pietro Pitts, a Caracas-based oil analyst who publishes Latin Petroleum magazine.

Citgo Petroleum, the Houston-based subsidiary of Venezuela's state oil company, provided $100 million of free heating oil in the 2007-08 winter to residents in 23 states, including 65 Indian tribes, said Brian O'Connor, a spokesman for Citizens Energy.

"I was depending on that oil to help our clients," said Letha Whitewolf, who manages the heating assistance program for the Northern Cheyenne in Montana. "It will be hard on them."

Whitewolf said that most households in 2008 got 100 gallons of propane, worth about $260. That covered about a month's heating bill, she said.

"We'll have to refer people now to churches and other organizations," she said.

Richard Moffi, who administers the fuel assistance program for Vermont, said his state's residents would be without the Venezuelan-provided oil just as demand for government help is rising.

"This was a safety net we could always rely on," Moffi said. "For those who didn't qualify for other programs, we knew we could always point them to Joe 4 Oil," which served as the program's toll free phone number.

Chavez instituted the low-income heating oil assistance program in 2005 through the help of Joseph P. Kennedy II, a former congressman and a son of the late Sen. Robert F. Kennedy. Kennedy heads Citizens Energy.

Chavez won cheers when he announced during a 2006 visit to a Harlem church that he planned to expand the program.

Critics have lambasted Kennedy for taking Chavez's oil. However, he's always been unrepentant.

"Some people say it's bad politics to do this," Kennedy says in a video on Citizens Energy's Web page. "I say it's a crime against humanity not to. Because no one, no one should be left out in the cold."

Kennedy remained hopeful on Monday that the Chavez government would reinstitute the program.

He called on people to write Chavez "to tell him the stories you have told me of the difference the generous donation of heating oil has made to so many of our fellow Americans."

Mark Wolfe, the executive director of the National Energy Assistance Directors Association, a Washington-based group, said Congress doubled the money available under the low-income heating oil program for 2008-09 but many people still will be cold.

"Citgo has been the only major oil company that has been willing to provide supplemental energy assistance," Wolfe said. "We're sorry they won't be able to do it this year."

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