Venezuela's Citgo resumes heating oil donations

By RACHEL JONES, AP, Jan. 29, 2009

CARACAS, Venezuela -- Venezuela's Citgo Petroleum Corp. resumed deliveries of free heating oil to poor Americans on Thursday, making its first delivery since the program's rumored end.

Together with Boston-based partner Citizen's Energy Corp., Citgo delivered more than 200 gallons of heating oil to the Dorothy Day Catholic Worker House, a transitional shelter in Washington, D.C.

"It's so cold, apartment rents are so high, and people are out of work," said volunteer and resident Kathy Boylan, 65, in a telephone interview from Washington about the 4-year-old program. "People need this help tremendously."

Citgo announced Jan. 7 that the free fuel shipments would continue - two days after Citizen's Energy said they were suspended in the world economic crisis.

President Hugo Chavez said the program had never been halted.

"There was a misunderstanding," said Alejandro Granado, Citgo's chief executive officer in a telephone interview.

Oil is the financial engine behind Chavez's socialist government. He has used it to bankroll an international aid bonanza, showering allies with cheap fuel, refining projects and cash donations.

The American heating oil program has been viewed as a jab at Chavez's nemesis, former President George W. Bush, by helping needy Americans in their own country. Last winter, the program provided free fuel to more than 200,000 households in 23 states.

Chavez "has sort of a ready-made constituency" in the U.S. poor, said Michael Shifter, an analyst for the Inter-American Dialogue think tank in Washington.

But Venezuela, which relies on oil for 94 percent of exports and nearly half the government's budget, has seen prices plunge more than 70 percent from last year's record high of more than $147 a barrel. Chavez has vowed to maintain broad social spending despite falling oil prices.

Nevertheless, Citgo decided to evaluate the program and to delay shipments until now to reach low-income residents when it was coldest, Granado said.

The program's continuation "represents a compromise on our part, a sacrifice," he added.

Shifter said while cutting the program may have been economically wise, Chavez may have new political reasons for keeping it - improving strained U.S. relations under President Barack Obama.

"It certainly would not be the best advertisement for the Bolivarian Revolution to sort of pull the plug," Shifter said.

Brian O'Connor, a spokesman for Citizen's Energy, said the nonprofit was told around Christmas that the program was under evaluation and decided to go public when nothing happened on the scheduled Jan. 5 start date.

"There was a lot of concern," said O'Connor, whose group had been taking phone calls from individuals seeking assistance since last summer.

But O'Connor said Citgo finished its evaluation and agreed to donate $100 million worth of heating oil this year - the same amount as in 2008.

Boylan, for one, is grateful. Since the shelter began taking part in 2006, she says it has saved roughly $5,000 a year - money it has used to fix its van and replace its roof.

"There were leaks and holes," she said. "The heat was probably going right through the roof."