The controversial program gave fuel from Venezuelan President Hugo Chavez's government to 200,000 households in 23 states through Citizens Energy, a charity organization run by Joseph Kennedy, the eldest son of late Senator Robert F. Kennedy.
Started as a discount [image-nocss] oil program in 2005, beginning in 2006 the program sent 100 gallons of free oil a year to eligible households. It drew fire from critics who called it a ploy by Chavez to undermine the Bush administration.
CITGO donated $100 million worth of heating oil last year, according to Citizens Energy.
At a news conference held at Citizens Energy's Boston headquarters, Kennedy said CITGO officials told him of their decision and he was forced to go public so that households expecting the assistance will know what's happening. "CITGO made it clear that this is not a cancellation of this program," Kennedy said. "But at the end of the day, the tankers are not going to be in front of this building."
Kennedy said "a couple of hundreds of thousands" will be affected by the CITGO suspension, including those living on dozens of Native American tribal lands. About 20 staffers at Citizens Energy also were told Monday they had been furloughed as a result of the suspension.
Kennedy urged those who have been helped by the program to write to Chavez to share their stories. Kennedy said that Citizens Energy will continue to run some of its heating assistance programs for now, but the majority of its programs outside of Massachusetts will be suspended.
"The big kahuna were those Venezuelan oil tankers," Kennedy said.
Kennedy also said he was seeking a face-to-face meeting with Chavez. CITGO did not respond to AP's requests for comment.
Citizens Energy was founded by Kennedy in 1979 in the wake of the energy crisis of the late 1970s with the goal of reducing the cost of home heating oil for the poor and elderly. Kennedy drew fire from critics of Chavez when he began the fuel assistance program with CITGO. Critics charged that Chavez, a socialist and staunch U.S. critic who famously called President Bush "the devil," was using the heating oil program as propaganda.
"It looks like the cost of bringing Fidel Castro's brand of rich-vs-poor politics to America just got to be too expensive for Venezuela's bellicose president, but it's hardly a surprise that he's pulling out of our economy now that he's crashed his own," said Larry Neal, deputy Republican staff director of the House Energy & Commerce Committee.
U.S. Representative Connie Mack (R-Fla.) once accused Kennedy of working with "a sworn enemy of the United States" and betraying the legacy of President John F. Kennedy, his uncle, who spoke of the perils of communism. Kennedy has responded that critics should hold oil-exporting countries and other trade partners, like Saudi Arabia, Kuwait, Russia and China, to the same standards.
On Monday, Kennedy also called out U.S. oil companies for not taking part in his efforts to provide heating assistance to low-income households. "This shouldn't be the responsibility of another country," Kennedy said. "I don't get one barrel from one U.S. company. Not one."
The move raises questions about whether Chavez can afford to continue his oil-fueled largess, added a Wall Street Journal report. Venezuela gives cut-priced fuel to many Latin American nations and sends some 100,000 barrels a day of oil and oil products to Cuba in exchange, in part, for the services of 30,000 Cuban doctors, nurses, dentists, and sports trainers. In 2007, Cuba valued total Venezuelan aid at $7.8 billion. Some analysts say Venezuela is now as big a donor to cash-strapped Cuba as the U.S.S.R. was back in the Cold War.
As crude prices have plunged in the past six months, spot prices for heating oil at New York Harbor have collapsed more than 60% to around $1.30 a gallon. That has considerably lowered heating costs, reducing the need for the program.
The oil-price slide is likely to crimp Venezuela's spending plans this year. The government calculated its $78 billion budget for 2009 using an oil-price forecast of $60 a barrel, almost twice the current $32.14 a barrel for Venezuela's crude basket.
Venezuela has some cushion. Over the weekend, the central bank said the country's international reserves topped $42 billion at the end of 2008, up 25% over 2007, the highest level on record, thanks to lofty oil prices for most of the year.
Click here to read Citizen Energy's statement.
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