No Discounted Transit for Oil

As part of a broad PR campaign this winter, Venezuelan President Hugo Chavez has offered discounted home heating oil to low-income residents of Boston and New York. Through Citgo, a subsidiary of Venezuela’s national oil company, a deal with three nonprofit housing programs in the Bronx will deliver lower costs to an estimated 8,000 residents in 75 apartment buildings. In Boston, an agreement allows the nonprofit firm Citizens Energy to resell Citgo fuel, using proceeds to offer heating oil at a 40 percent discount to low-income residents. On January 13, Citizens Energy announced that it would also extend this discount to qualifying customers in Rhode Island.

The attention these programs have garnered has helped to counter naysayers like Pat Robertson, who called for the assassination of Chavez last year, and U.S. press outlets that consistently print unflattering stories in which the title “dictator” often lurks very close to Chavez’s name.

In October, Chavez offered the Chicago Transit Authority (CTA) diesel fuel at a 40 percent discount, a savings that would amount to $15 million. The one condition? Chavez asked that the savings be passed on to low-income families in the form of discounted or free transit cards. The CTA has declined the offer.

Journalist Jessica Pupovac broke the story for the New Standard News, an online news site, on December 28. In These Times recently sat down with Pupovac to discuss the story:

Can you tell us a little bit about what’s going on with the program sponsored by the Venezuelan government in New York and Boston?

Last September, when Hugo Chavez was in New York for the U.N. Summit, he promised the people of the South Bronx that Venezuela would provide heating oil at discounted rates to help offset the rising costs of oil in the U.S. this upcoming winter. He made this promise in the context of realizing how much income disparity there was in the United States–kind of in an act of solidarity with low-income communities in the United States. In the Bronx, Citgo signed a deal with three different community organizations that work in housing development projects or low-income housing projects. And then in Boston, they signed a similar deal with Citizens Energy Corp, which is an organization that helps deliver heating oil to low income, mostly elderly residents in the Boston metropolitan area. These programs are currently underway; they’ve begun delivering the oil. In most cases, the oil is being delivered directly to the housing projects and the residents are enjoying a reduced rent during the winter, because they don’t pay heating separately.

What has Citgo offered the Chicago Transit Authority?

Last October, Citgo offered CTA of 7.2 million gallons of diesel fuel at 40 percent off the current market value. The estimates were that this could save the CTA $15 million.

As part of the deal, Citgo requires the CTA to pass these savings on to Chicago’s low-income residents in the form of either free or hugely discounted fare cards, which would help people this winter, especially with rising heating costs and the simultaneous increase in CTA fares. They made this offer in very vague terms, just to initiate the discussion and asked that the CTA consult with their technical advisers to find out exactly what the specifications of the diesel fuel that they require are, how Citgo could procure those, how they would go about delivering them, etc.

But, according to Martin Sanchez, at the consul general of Venezuela in Chicago, the CTA hasn’t given those specs to Citgo.

The Chicago Transit Authority has turned down the offer. What is their reasoning?

The CTA has not officially turned down the offer to Citgo. They’ve turned down the offer in the media but they have not responded to Citgo or the Venezuelan embassy directly. That’s why a lot of local politicians feel that the question is still on the table, that there’s still some chance of convincing the CTA to take them up on their offer. The CTA however, is claiming that they cannot accept the offer because Citgo doesn’t sell low-sulfur diesel fuel in the Midwest.

However, Citgo is saying that, no, they don’t sell low-sulfur diesel fuel here in the Midwest because there isn’t a demand for it, but they would be able to procure it.

What do you think is the real reason that the CTA’s turned down Citgo’s offer?

Well, it’s hard to speculate why the CTA would decide to turn down so much discounted fuel when they’re in the midst of a huge budget crisis–one that is causing them to raise fares. According to WBBM radio, they have a written report on their Web site dated January 5, that says, “[Frank] Kruesi [the CTA president] has had reservations about dealing with Citgo because of the tensions between the Bush Administration and the government of Venezuelan President Hugo Chavez, an unease that surfaced again Wednesday.” So if that’s what Kreusi says, then, you know, I suspect that politics is coming into play in the CTA’s decision to reject this offer.

But a number of Chicago politicians really want this deal to happen.

Billy Ocasio, an alderman in the 26th Ward, actually initiated this discussion. He has a special relationship with Citgo because they sponsored Fiesta Boricua, the Puerto Rican cultural festival in late summer. That festival almost didn’t happen because they didn’t have enough money, and Citgo stepped forward as an act of solidarity with the Latino community of Chicago and provided the funding.

When Alderman Ocasio heard of Citgo’s initiatives in New York and Boston and that they wanted to begin those programs here in Chicago, he contacted the Citgo officials and said, “Let’s get this on the table. Let’s get this conversation started.” So he has been an integral part of trying to push this forward.

Rep. Luis Gutierrez, (D-Ill.) has spearheaded, along with Ocasio, a coalition of community organizers and activists and politicians who are pushing for the CTA to accept Citgo’s offer. Gutierrez is basically saying that he can’t understand a government agency that is so short on funds, which goes down to Springfield every year with its hat in its hand asking for more money because of what Gutierrez was calling “poor fiscal management”, can turn down an offer like this. He has basically said, “You know, if the people of Venezuela want to give this public gift then Frank Kruesi needs to step out of the way and let this happen.”

This interview was conducted for the January 9 episode of Fire on the Prairie, a radio show sponsored by In These Times.