Madrid/The current crisis is being more lethal for small businesses in Cuba than the covid-19 pandemic. This is the conclusion reached by the consulting firm Auge in a new report on the impact of the lack of fuel on MSMEs. published this Thursday. The text, signed by Oniel Díaz Castellanos, includes a survey carried out among 63 companies, which shows serious figures: 78% of them reported drops in their sales since, a month ago, Donald Trump signed the executive order which decreed the imposition of tariffs on countries that supplied oil to the Island.
The decision, added to the suspension of fuel shipments from Venezuela after the fall of Nicolás Maduro, has Cuba almost paralyzed. “We’re not just talking about small businesses. When actors like Supermarket 23, Cubamax, Melia either Sherritt reduce operations, the signal is clear: the impact is systemic,” says the consulting firm in the announcement of this report, the second in a specific series announced, inaugurated by an analysis that stated that more than 96% of private enterprises “They face an impact that ranges from severe to catastrophic due to fuel shortages.”
On this occasion, Díaz Castellanos compares the current crisis with the one that companies suffered during the coronavirus and explains why the situation is worse now. “When the pandemic paralyzed the country in 2020, many entrepreneurs discovered that they could reinvent themselves. Teleworking, deliverybusiness reconversion. It was hard, but there were ways,” he explains. “Today, the question is different: what happens when what is missing is not a client, but the energy itself to operate?” The consultant finds several differences with that time, starting with the nature of the problem. “Energy is not just another input: it is the basis on which everything else rests,” he asserts.
“Without fuel, suppliers cannot transport. Supply chains are broken. First it arrives less, then it arrives late, then it does not arrive”
The decline of companies is being gradual, he affirms, but this gradualness “is treacherous.” As fuel reserves are depleted, “inventories are reduced without replacement” and “the savings are consumed in gasoline at astronomical prices.” The crisis does not only concern the vulnerable, says Díaz Castellanos, reiterating the names of large firms such as Cubamax or Sherritt: “it hits everyone from the microenterprise to the transnational corporation.”
The consultant specifically mentions the five “deepest wounds” that the lack of fuel is leaving in businesses, two of them, zero income and zero raw materials. “When there is no energy, there is no production. When there is no production, there are no sales. The chain is simple and brutal,” the text details. And he adds: “Without fuel, suppliers cannot transport. Supply chains are broken. First it arrives less, then it arrives late, then it does not arrive.”
Another of the “wounds” is that everything perishable is lost due to lack of refrigeration, and another, “total decapitalization.” In this regard, Díaz Castellanos recalls the study on business climate published by the same consulting firm last December, which revealed that 60% of MSMEs had invested in solar panels or power plants. For these, he continues, “survival is possible, although with high costs.” The remaining 40%, he continues, “face a cruel decision: buy fuel on the black market at unattainable prices and quantities that tend to be increasingly smaller, or become paralyzed.”
Finally, there is the “wound” of fixed costs without return: “The rent of the premises, the custodian, the taxes. All those invoices continue to arrive even if the business does not produce.”
In the midst of this panorama, the document indicates, there are companies that maintain their sales thanks to inventories, but, be warned, when they run out, they will have nothing to sell. “The fall could be abrupt and massive,” warns the consultant. “Then the business crisis will show its true face.”
