February 27, 2006

Venezuela expands controversial US fuel sales

BOSTON (Reuters) - Venezuela's controversial fuel subsidies
for the U.S. poor expanded into Connecticut on Monday, two
weeks after U.S. Republican lawmakers questioned whether the
cheap oil masked a broader anti-American agenda.

The assistance, described as "humanitarian aid" by
Venezuela's embassy in Washington, deepens an ongoing spat
between leftist President Hugo Chavez and President George W.
Bush, who calls Chavez a threat to democracy in Latin America.

Venezuela, where per capita income is about one tenth that
of the United States, will provide 4.8 million gallons of
heating oil at a 40 percent discount to Connecticut households
that qualify for state home heat assistance, state officials

"This heating oil assistance fills an unfortunate,
profoundly important need for our citizens -- and is consistent
with our laws," said Connecticut Attorney General Richard
Blumenthal in a statement released on one of the coldest days
of the winter in the Northeast United States.

Connecticut is the seventh state to receive cheap oil from
Venezuela, which also sent shipments to Massachusetts, Maine,
Rhode Island, Delaware, Pennsylvania and Vermont. The Bronx in
New York City also joined the program.

Citgo estimates that it will be distributing some 44.5
million gallons of discounted heating oil and giving another
258,000 gallons free to homeless shelters.

Blumenthal said about 15,000 low-income Connecticut
citizens would benefit from the deal with Citgo, a refiner and
gasoline retailer owned by Venezuelan state oil company PDVSA.

The exports are seen as an attempt by Chavez to embarrass
the Bush administration, which the Venezuelan leader says
neglects poor Americans.

Flush with cash from soaring oil prices, Chavez has used
his nation's petroleum wealth to secure closer ties with South
American neighbors while taunting Washington by pushing his
socialist ideas as an alternative to U.S. influence.

Venezuela supplies about 15 percent of U.S. oil imports.

In a backlash against the fuel program, one Texas-based
religious organization has promoted a boycott of Citgo to
protest Chavez's confrontation with the U.S. government.

Rep. Joe Barton of Texas, chairman of the House Energy and
Commerce Committee, has expressed concern over whether the
sales are "part of an unfriendly government's increasingly
belligerent and hostile foreign policy" toward Washington.

Rep. Ed Whitfield, a Republican from Kentucky, has said he
wanted to find out if the program was "part of a larger
political agenda."