Venezuela reinstates free heating oil for poor in U.S.

CARACAS, Venezuela — The Venezuelan government reversed course on Wednesday, announcing that its U.S. oil subsidiary will continue to provide free home heating oil to poor Americans. Critics of President Hugo Chavez had pummeled him for suspending a program that he had milked for its maximum publicity as a champion of the poor, even in the U.S. In the wake of Monday's announcement of the program's suspension, analysts had predicted this was only the first of Chavez's ambitious foreign assistance programs that would disappear, given the sharp drop in oil prices and the Venezuelan government's dependence on oil export income. Venezuelan government officials wasted no time in reinstating the program, which saved about 180,000 U.S. households around $260 apiece in 2008. That covered about one month's heating bill. Among the beneficiaries of the 100 gallons of heating oil were 65 Indian tribes, including those in Alaska , Montana and South Dakota. Alejandro Granado , the chairman, president and chief executive officer of Citgo Petroleum, the Venezuelan government's Houston -based oil subsidiary, said he discussed the plan to renew the program with Chavez on Wednesday morning. The 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," Granado said in a statement. Venezuelan oil, which is a lower grade than conventional crude and trades at a lower price, peaked at $126 a barrel in July and now sells for about $40 a barrel. About 93 percent of Venezuela's export revenue comes from oil sales, mostly to the U.S. Granado made his statement in Boston alongside Joseph P. Kennedy II , who's the chairman of Citizens Energy Corp. , the Massachusetts -based nonprofit that manages the program. "Chavez is trying to save face," said Dennis Jett , a former American ambassador who's now a professor of International Affairs at Penn State University . "He decided he needs to hide the fact that he's having a cash crisis." Monday's announcement also had prompted critics to have a field day with Kennedy, the son of Robert F. Kennedy and a former Democratic congressman. Kennedy had announced that 20 staffers would be laid off. "For Joe, all that remains was sullied family honor and no fuel," Investor's Business Daily wrote Tuesday. "He'd been used by Chavez during the boom, thrown overboard as excess baggage during the bust, and finally realized it Monday." Kennedy appeared to have had the last laugh on Wednesday. Kennedy said he's "personally aware of President Chavez's genuine concern for the most vulnerable, regardless of where they may live. He added, "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 U.S. administration is scheduled to be sworn-in within the next few weeks." Brian O'Connor , Citizen Energy's spokesman, said Citgo will serve as many customers in 2009 as the year before but will spend less than last year since oil prices have declined. The program cost Citgo $100 million in 2008. People unable to pay their heating bills can call a toll-free hotline number, 1-877-JOE-4- OIL, as of Jan. 19 .