MIAMI, Jan. 6 (UPI) -- Venezuela has suspended its program of providing free heating oil for America's poor following a recent decision to slash its federal budget due to falling global oil prices.

Low-income residents in 23 U.S. states who depended heavily on discounted heating oil from Venezuela to get through the cold winter months will have to find another way to heat their homes in the coming months.

Venezuelan oil company Citgo Petroleum Corp. earlier this week suspended contributions to a Boston non-profit program that provided free heating oil to some 200,000 Americans nationwide over the last several years, according to The Boston Globe.

"It's a financial issue, that's all," said former Massachusetts Rep. Joseph P. Kennedy II, the president of Citizens Energy Corp.

"We are doing everything we can," Kennedy said. "We're not ready to give up."

The discounted oil program initiated by Venezuelan state-oil company PDVSA and promoted by President Hugo Chavez has riled anti-Chavez Washington. U.S. critics contended the program was more about embarrassing the United States than charity, part of the ongoing tensions between Venezuela and its largest oil customer, the United States.

Over the last several winters, Citgo has provided discount oil to several U.S. communities, including those in Boston and Maine, where inflated global oil prices have made the cost of heating a home prohibitively expensive for some poor Americans.

Chavez has been accused by the Bush administration of trying to promote his radical brand of socialism in the region, while the leftist leader accuses the White House of meddling in Venezuelan affairs and of trying to undermine his administration.

The cutbacks to Venezuela's heating oil program followed an admission at the end of 2008 that the country's oil sector grew only 3 percent in 2008, down from 6 percent last year.

In recent weeks, Chavez has conceded that his country's oil-based economy could be in trouble as world oil demand decreases and a global financial crisis looms.

"The (Venezuelan) economy will endure difficult times in years to come, no doubt," said Chavez earlier this week in a nationwide address, noting that the economic difficulties facing countries like the United States have yet to hit Venezuela.

However, the Venezuelan leader said he was certain Venezuela would endure economic hardships to come.

Acknowledging the uncertainty in the world economy and the falling price of oil, which makes up the vast majority of Venezuela's export revenue, the leftist Chavez called for a reduction of state spending in 2009, following years of wide-ranging spending on social programs and discounted oil sales for allies in the region.

Venezuela's handling of its oil industry amid difficult economic times could prove crucial to efforts by Chavez to amend the country's constitution to allow him to run for a third term of office in 2012.

"I am ready, and if I am healthy, God willing, I will be with you until 2019, until 2021," he said earlier this month. Last year Chavez lost a constitutional referendum on several issues, including term limits.

Trouble in the oil sector, both at home and internationally, could prevent Chavez from getting the amendment he'd need to maintain the Venezuelan presidency.

Hoping to stem the tide of Venezuela's falling oil revenue, Chavez and the country's leading energy officials have called for the Organization of Petroleum Exporting Countries to further cut oil production across the board, in hopes of halting the decline in the barrel price of oil.

At home, Venezuela in November told oil customers that production levels would be cut to counter falling oil prices, part of a recent OPEC agreement.

PDVSA is decreasing production by 129,000 barrels per day, according to Venezuela's Oil Ministry and PDVSA officials.

--

(energy@upi.com)