Page last updated at 10:17 GMT, Thursday, 8 January 2009

Venezuela resumes fuel aid to US

Citizens Energy head Joseph Kennedy (left) and Citgo chairman Alejandro Granado
Citgo's chief Alejandro Granado (right) said supplies would continue

Venezuela will continue to donate heating oil to some 200,000 low-income US households, reversing a decision to suspend supplies, officials say.

Citgo, the US-based arm of Venezuela's state oil company, said it had found a way to keep paying for the donations.

On Monday, the group that administers the scheme said Citgo had been forced to re-evaluate its social programmes as a result of falling world prices.

The scheme was set up in 2005 by Venezuelan President Hugo Chavez.

At the start of the week, Citizens Energy, the charitable organisation group that administers the scheme, said the global economic crisis and falling world oil prices had forced Venezuela to halt the oil aid.

Citizens Energy head Joseph Kennedy said he was appealing to President Chavez to find a way to keep the programme going and urged Americans who had benefited to write to Mr Chavez to tell him what a difference it had made to their lives.

Oil dependence

On Wednesday came the reversal with Citgo announcing the scheme would continue.

"This decision is the result of a strong commitment and a big effort on the part of Citgo and our shareholder in light of the current global financial crisis and its impact on the oil industry in general," said Citgo chairman Alejandro Granado.

Venezuela is heavily dependent on oil, getting some 90% of its foreign currency reserves from the sector.

Mr Kennedy, the nephew of the late President John F Kennedy, thanked President Chavez for the decision to resume the programme.

"This decision is a clear, direct message from President Chavez of his desire to strengthen relations between his country and the United States, particularly at this time, when a new US administration is scheduled to be sworn in within the next few weeks," Mr Kennedy said.

Citgo, which is the US refining arm of the Venezuelan state energy company PDVSA, last year distributed discounted and free heating oil worth some $100m (68m) to communities in 23 states, including Massachusetts, Ohio and Pennsylvania.

When the scheme began four years ago, critics decried it as a propaganda stunt by President Chavez, aimed at annoying the Bush administration, and criticised Mr Kennedy for taking part.

But Mr Kennedy has criticised US oil companies for not giving 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 has said.

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