Chavez ships cheap fuel to American poor

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Venezuelan President Hugo Chavez has pulled off a public relations coup in his long-running campaign to irritate the Bush administration, concluding a deal to supply cheap fuel to thousands of poor residents of Boston and New York.

To the annoyance of many in Washington, Citgo Petroleum Corp., a company controlled by the Venezuelan government, is to supply more than 12 million gallons of heating oil at 40 percent below market prices.

The deal is one of the most visible moves in Mr. Chavez's bid to market his "21st-century socialism" using his country's oil wealth.

Although it will not change many minds in Washington about his populist and autocratic regime, the government in Caracas hopes that it will help to stake out Mr. Chavez's claim as the coming leader of an anti-capitalist Latin America.

State Department spokesman Sean McCormick, asked about the program Tuesday, said: "We understand that [Citgo] is incorporated in the United States and is free to decide, you know, as it wishes how it distributes oil in the United States."

Mr. Chavez, who once dubbed President Bush a "genocidal madman" and led a huge anti-American protest this month in Argentina, first proposed his fuel offer in August when oil prices had reached a record high.

Prices have dipped since then, but public concern over the cost of heating bills this winter is still widespread.

Linda Kelly of Quincy, Mass., whose family received a symbolic first delivery this week, told the Associated Press that she thought Mr. Chavez was "doing the right thing."

Shipments are scheduled to reach tens of thousands of families starting next month, and hospitals, homeless shelters and other facilities in needy communities also are in line to get oil, the AP said.

The news agency said Rep. Bill Delahunt, a Massachusetts Democrat, had discussed the discount oil sales over a dinner with Mr. Chavez in August and has called for U.S. oil companies to follow Citgo's lead.

Joe Kennedy, the chairman of Citizens Energy, one of the organizations that will distribute the oil, said the deal highlighted the failure of oil companies in the United States and the government to step in to help.

"Our federal government has made billions and billions of dollars just this year on the royalty payments the oil companies pay to the government," he said.

But when it is a question of poor Americans, Mr. Kennedy said, "What do we hear from Washington? Sorry boys. There's no money in the till."

In Washington, where Mr. Chavez is excoriated for his support for Cuban President Fidel Castro, regional observers suggested that the deal was more about politics than economics.

"This will have limited practical impact," said Eric Farnsworth, vice president of the Council of the Americas who served as an adviser to President Clinton on Latin America.

"Massachusetts is not exactly out of the market economy; they can procure all the energy they need. This is, however, consistent with what Venezuela is trying to achieve."

To promote his image and influence, Mr. Chavez has offered cheap oil and refineries to his neighbors and pledged financial support for regional development programs. All the while, he has positioned himself as a rival to Washington, accusing the Bush administration of plotting a coup against him, and predicting the imminent demise of American capitalism.

He burnished his profile at a regional leaders' summit this month when he led opposition to a U.S.-backed plan for a regional trading bloc, but no major figure signed up to support his alternative vision.

America receives about 10 percent of its oil from Venezuela.