Is oil offer kind or cunning?

Venezuela's leader offers discount heating oil to U.S. poor, but some question his motives.

Published November 24, 2005

MIAMI - First it was Fidel Castro offering to send Cuban doctors to help out after Hurricane Katrina. Now Venezuelan leader Hugo Chavez, Castro's ally and fellow U.S. antagonist, is reaching out to America's poor.

Humanitarian gesture? Or rank opportunism by a wily populist?

Citgo, a subsidiary of Venezuela's state-owned oil company, is to ship 12-million gallons of discounted home heating oil to charities in Massachusetts next month. Forty-thousand families may benefit.

The special oil shipment was arranged with Chavez by U.S. Rep. William D. Delahunt, D-Mass., and a local nonprofit energy corporation, Citizens Energy, headed by former U.S. Rep. Joseph P. Kennedy II.

The Venezuelan oil will be distributed to institutions that serve the poor, such as homeless shelters, food banks and low-income housing groups, according to officials from Citizens Energy.

The deal comes as U.S. oil companies are under fire for high fuel prices despite record $32.8-billion quarterly profits.

The fuel will be sold for 60 cents to 80 cents a gallon less than current retail prices, a savings of about 40 percent, according to Felix Rodriguez, president of Citgo Petroleum Corp., the U.S. refining and retail arm of Petroleos de Venezuela.

"Oil companies have to help people," Rodriguez said at a news conference in Boston. "Business isn't our only issue."

The total value of the discounts Citgo is offering in Boston could reach $14-million, Rodriguez said.

Citgo is planning a similar program to sell 8-million gallons in New York, according to a statement from Rep. Jose Serrano, a Democrat who represents the South Bronx.

The Boston contract was arranged after months of talks between Delahunt, Kennedy and Chavez, a leftist former military officer who was elected president in 1998.

Chavez proposed offering fuel directly to poor U.S. communities during a visit to Cuba in August. He has said the aim is purely humanitarian. But in some recent comment he reveals a more political agenda.

Chavez told the Argentine newspaper Clarin last month that Venezuela has "a strong oil card to play on the geopolitical stage." He said, "It is a card that we are going to play with toughness against the toughest country in the world, the United States."

One of the world's largest oil exporters, Venezuela supplies about 13 percent of U.S. oil needs. Foreign policy analysts say Chavez is using "oil diplomacy" to try to undermine U.S. influence in a region it once considered its own back yard. Chavez has recently entered into a deal to provide cheap oil financing for 14 Caribbean nations, as well as buying $800-million of Ecuadoran and Argentine debt.

Chavez has pledged $50-million for social programs in the Caribbean, as well as offering to invest billion of dollars to build refineries in Jamaica, Cuba and Brazil.

Critics say Chavez's effort to woo the region with petrodollars comes at the expense of Venezuela's own poor. But it suits his political agenda.

"This is precisely what he loves to do - embarrass the White House, show that the U.S. doesn't take care of its own," said Michael Shifter of the Inter-American Dialogue, a Washington think tank on Latin America.

Chavez delights in accusing the Bush administration of not doing enough to help the poor, calling Bush "Mr. Danger." He has led regional opposition to a U.S-backed free-trade pact for the Americas, which Chavez describes as "the path to hell."

His anti-U.S. rhetoric has grown steadily after an April 2002 failed coup attempt against him that he says was sanctioned by Washington. Bush administration officials have denied any involvement in the coup.

A self-styled revolutionary, Chavez has become a latter-day Che Guevara to some on the left who say he has swept away a traditionally corrupt political and business elite while giving a voice to the poor. But he has drawn criticism from human rights groups for his treatment of political foes and for curbing the freedom of the media. Critics say Chavez's government is just as corrupt as its predecessors.

At a congressional hearing last week, U.S. Assistant Secretary of State for Western Hemisphere Affairs Thomas A. Shannon Jr. said the Chavez government was "subverting democratic institutions by using them to restrict the rights of those who disagree with it."

Delahunt denied the oil deal had anything to do with Chavez's efforts to upstage the White House.

"This is a humanitarian gesture," he said, speaking after a news conference with Venezuelan officials outside the home of a constituent who will receive heating aid.

Kennedy said he was not concerned about Chavez's politics.

"You start parsing which countries' politics we're going to feel comfortable with, and only buying oil from them, then there are going to be a lot of people not driving their cars and not staying warm this winter," Kennedy said.

"There are a lot of countries that have much worse records than Venezuela. At the end of the day it's not our business to go choosing other peoples' leaders, particularly when they are duly-elected democratic leaders."

Home heating oil prices are expected to increase by 30 percent to 50 percent this winter, according to Larry Chretien, executive director of Mass Energy Consumers Alliance, another nonprofit group that will distribute the discounted oil. A federally funded Heating Assistance Program was insufficient to meet the needs.

"Fuel assistance is woefully underfunded, so this is a major shot in the arm for people who otherwise wouldn't get through the winter," he said.

Information from the Associated Press, Boston Globe and Washington Post was used in this story.