Venezuela suspends fuel aid to US

SOME 200,000 US households will no longer get cheap heating oil from Venezuela after the state-owned CITGO subsidiary announced it was dropping the program due to falling oil prices.

"Citizens Energy has recently been informed by CITGO that due to falling oil prices and the world economic crisis, CITGO has been forced to re-evaluate all their social programs, including the heating oil program,'' Citizen Energy Corporation spokesman Brian O'Connor said.

"Close to 200,000 households throughout the US'' benefited from the Venezuelan program since 2005, he said, adding that Venezuelan oil donations in 2007 amounted to $100 million ($138 million).

Venezuelan President Hugo Chavez in 2005 irked the administration of President George W. Bush when he announced the cheap heating oil program for US households in the midst of rising oil prices.

Some branded the offer as propaganda.

Since July, however, the price of oil has plummeted from $US130 a barrel to a little over $US27, raising concerns in Venezuela, which derives 90 per cent of its foreign currency revenues from oil.

The government gets half its funding from oil.

Citizens Energy president Joseph Kennedy II said he personally appealed to Mr Chavez to keep the discount oil program running, to no avail.

Mr Kennedy, who is the nephew of the late President John F Kennedy, however urged Americans who had benefited from the programme to write to President Chavez to tell him what a difference it had made to their lives.

"All of us at Citizens Energy continue to do everything we can to advocate a continuation of this vital assistance," he said in a statement.

It is probably the Venezuelan government's highest profile cutback to date.

Mr Kennedy, however, criticised US oil companies for not taking part in efforts to give heating assistance to low-income households.

"This shouldn't be the responsibility of another country. I don't get one barrel from one US company. Not one," he said.

Mr Kennedy said he had received assurances from Citgo that the programme was only being suspended and not cancelled altogether.

But no date could be given for when it might be resumed and around 20 employees from Citizens Energy have been given a leave of absence.

Mr O'Connor said the group was warned weeks ago by Citgo of its impending decision, which he regretted came as a shock "not only in the middle of the winter, but in the middle of an economic shot,'' referring to the global economic crisis.

Agence France-Presse/BBC/TZG