Venezuela's Chávez shuts off free oil program for US poor

Venezuela's state oil company is suspending a much-promoted program that provided free heating oil to hundreds of thousands of poor people throughout the United States, the company announced Monday.

The program has been a public relations bonanza for Venezuelan President Hugo Chávez, a socialist who frequently attacks capitalism and the US. President Chávez repeatedly has tweaked the noses of US policymakers by saying the program shows that he's a good friend of America's poor.

Venezuela is halting the program at least temporarily because the sharp drop in oil prices is forcing the country to reduce government spending, the firm said in a statement from Citizens Energy Corp., a Boston-based nonprofit that's managed the program in the US.

Monday's announcement was among the first of many measures that are expected in the coming months as Chávez's oil-dependent government tries to eliminate programs that don't benefit Venezuela's poor, following a global price drop from $147 a barrel in July to nearly $50 now.

"Venezuelan government officials would rather cut social programs abroad – such as in the United States, Ecuador, and Nicaragua – than affect social programs in Venezuela," said Pietro Pitts, a Caracas-based oil analyst who publishes Latin Petroleum magazine.

Citgo Petroleum, the Houston-based subsidiary of Venezuela's state oil company, provided $100 million of free heating oil in the 2007-08 winter to residents in 23 states, including 65 Indian tribes, said Brian O'Connor, a spokesman for Citizens Energy.

"I was depending on that oil to help our clients," said Letha Whitewolf, who manages the heating assistance program for the Northern Cheyenne in Montana. "It will be hard on them."

Ms. Whitewolf said that most households in 2008 got 100 gallons of propane, worth about $260. That covered about a month's heating bill, she said.

"We'll have to refer people now to churches and other organizations," she said.

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