The Miami Herald
Jun. 01, 2002

Cost of goods at Cuba's dollar stores to rise

  HAVANA - (AP) -- Struggling with a financial crisis, Cuba's communist government announced major price increases Friday at the country's dollar stores, but promised the cost of basic foodstuffs and other essentials would remain the same or decline.

  Under the measures taking effect Monday, the government will ''reduce the prices of a gamut of primary need and wide consumption products, especially food, and
  increase those for a series of articles,'' the Economics Ministry said in a communique published Friday in the Communist Party daily Granma.

  Price changes will be decided ''more or less on the type of product,'' it said.

  All price increases will occur in the island's dollar stores, where Cubans and foreigners can buy products ranging from packaged foods to electronic appliances with U.S. currency.

  The Economics Ministry gave no exact figures on how much more imported items such as electronics, foreign cigarettes and gasoline would cost.


  Written guidelines for prices have been circulating among state enterprises and the general population in recent days, but it is unclear if the price changes listed are
  simply proposals or have final government approval. The most dramatic increases on one such list call for gasoline to be raised from $2.85 cents to $3.99 a gallon for regular grade, and from $3.42 to $4.56 a gallon for premium. For cigarettes, the cost would rise from $1.50 to $2.50 per pack for imported and from about 26 cents to 34 cents per pack for domestic brands.

  The price increases appear mostly aimed at imported consumer goods, including shoes, clothing, hair care products and audio equipment.


  Mild price reductions evidently are planned for more essential goods, including food such as powdered milk and chicken, the most basic personal care products such as soap, toothpaste, disposable diapers and sanitary napkins.

  Cuba, which imports about $600 million annually in foodstuffs, says its economy has been battered in recent months by rising world prices for imported petroleum

  At the same time, international prices for sugar and nickel -- two of the island's primary exports -- are down. So is tourism, which in recent years has replaced sugar as the island's No. 1 source of hard currency, earning as much as $2 billion annually.

  The Tourism Ministry recently reported a 14 percent drop in tourism during the first quarter.

  The Economics Ministry said dollar stores have maintained prices without ''any important changes'' since they were opened in 1993 after Cuba allowed citizens for the first time in decades to legally hold and use American dollars.