In response to the rampant rise in food costs, municipal authorities in Songo-La Maya, located in Santiago de Cuba, have established reference prices for oil and eggs. However, this decision fails to address other essential goods that are also experiencing significant price hikes.
Invoking Resolutions 345 and 350, officials have set a price ceiling of 2,500 Cuban pesos for a one-liter bottle of oil and 110 pesos per egg. Despite these measures, the authorities clarified that these are not strict price caps but rather "values derived from an evaluation of costs and expenses associated with the marketing of these products."
This nuanced terminology doesn't alter the essence: any business charging above these suggested prices risks facing severe penalties. According to Decree-Law 91, Article 12, subsection j), violators could face fines up to 60 quotas of 1,000 pesos each, totaling 60,000 Cuban pesos.
In addition to monetary fines, the authorities have announced potential confiscation of goods, partial business suspension, or even closure for up to three months. To facilitate complaints, the municipal government has set up three phone lines: Public Attention (22378529), Municipal Directorate of Finance and Prices (22378149), and the DIS (223788283).
This measure comes at a time when oil was being sold for between 4,000 and 7,000 pesos per liter in various parts of the country, and eggs reached prices between 250 and 300 pesos each in Santiago de Cuba, with cartons of 30 eggs costing up to 7,500 pesos.
Songo-La Maya joins a string of municipalities across Cuba that have introduced price controls since early August. Guantánamo led the charge on August 5th, setting a reference price of 2,200 pesos per liter of oil, followed by Moa and Banes in Holguín with the same pricing. San Luis set oil at 2,200 pesos and eggs at 120 pesos on August 8th, while Villa Clara established caps of 2,500 pesos per liter of oil and 110 pesos per egg on the same day. Matanzas followed suit on Sunday with identical values.
This wave of price fixation was triggered by Resolution 150/2026 from the Ministry of Finance and Prices, which on June 20 removed national price caps for oil, cut chicken, powdered milk, pasta, and sausages. On July 16, the Council of Ministers also lifted the cap on rice.
The irony here is undeniable: while the regime liberalized prices in June, municipalities are now reimposing controls due to public pressure, a reversal that economists themselves question.
Economists Pedro Monreal and Elías Amor have criticized the reintroduction of price caps, labeling it as "absurd" and warning that it historically leads to shortages, drives products to the black market, and fails to address underlying inflation issues.
Questions About Price Controls in Cuba
What are the new reference prices for oil and eggs in Songo-La Maya?
The new reference prices in Songo-La Maya are set at 2,500 Cuban pesos for a liter of oil and 110 pesos per egg.
What penalties do businesses face for exceeding these prices?
Businesses that exceed these prices risk fines up to 60,000 Cuban pesos, confiscation of goods, partial business suspension, or closure for up to three months.
Why are these price controls being reintroduced?
Price controls are being reintroduced due to public pressure in response to the liberalization of prices earlier this year, despite concerns from economists about their effectiveness.