Cuban Economists Slam New Price Caps: "They Learned Nothing"

Two Cuban economists have denounced as "absurd" and a "failure" the decision by several provinces to reintroduce price caps on essential items such as oil, eggs, powdered milk, sugar, and sausages. This move comes just weeks after the regime itself had lifted these caps as part of its economic reform package.

The contradiction is stark: On June 19, the National Assembly endorsed what it termed 176 economic transformations, explicitly including the end of centralized price controls. These controls were previously blamed for causing shortages and driving goods to the black market. Yet, in less than two months, provincial authorities in Villa Clara, Santiago de Cuba, Guantánamo, Holguín, and Matanzas have unilaterally and haphazardly imposed new limits.

Pedro Monreal, a Cuban economist with a significant social media following, summarized the situation on his Facebook profile with a cutting remark: "176 measures and one achievement: proving they learned nothing."

Monreal further noted that "the supposedly more liberal approach of the 176 measures faded in less than two months" and unfavorably compared it to the failed 2021 "Ordering Task" reform. He remarked that the earlier reform, at least, had "an explicit and quantified design for correcting relative prices," whereas the 176 measures lack any public evidence of a similar pre-design.

Economic Disarray Under Communist Control

Elías Amor, economist and author of the blog Cubaeconomía, was equally blunt: "The Communist Party deciding commercial margins and retail prices. It's time to pack up and leave."

Amor described the situation as the "absurd unreality of the economic model dominating Cuba since 1959" and warned that the Agreement 157 passed by the Provincial Council of Villa Clara—which set egg prices at 110 pesos each, oil at 2,500 pesos per liter, and powdered milk at 3,120 pesos per kilogram—led to "an immediate shortage of essential goods and services."

The trigger for this regression is an inflationary surge that surpassed official forecasts. Oil, priced around 1,500 pesos in April, shot up to over 4,000 pesos in August, with peaks reaching 7,000 pesos per liter in some areas.

Amor also highlighted that the issue is not confined to Villa Clara: "The foolishness isn't limited to Villa Clara but extends to the Guantánamo municipal administration, which has also moved to regulate oil prices, which have recently risen to over 6,000 pesos per unit."

Public Skepticism and Government Ineptitude

The public has greeted the new controls with skepticism. In response to the announcement of reference prices in San Luis, Santiago de Cuba, one internet user summed up the general sentiment: "I'll believe it when I see it."

Past experiences support these doubts: earlier this year, a similar attempt in Guantánamo resulted in 1,538 fines and 162 forced sales without achieving stable prices. On June 18, Miguel Díaz-Canel himself admitted that previous caps had "caused shortages, diverted goods to illegality, and reduced revenue," a claim now laid bare as the cycle repeats.

Amor concluded that the solution does not lie in state controls but in a free market: "Cubans need to know that this mechanism is possible and that it can and should function in Cuba's economy once the current model, unable to ensure an affordable supply of oil, is replaced."