Venezuela's Texas-based oil subsidiary Citgo has suspended its scheme to provide cheap heating oil to thousands of low-income families in the US.

The programme is being halted because of falling world oil prices, Citizen Energy, the group that administers the scheme said.

Over the past two years, Venezuelan President Hugo Chavez gave village families more than $16 million worth of heating fuel through his country's government-owned oil company, Citgo Petroleum. Last year, Citgo provided roughly $100 million in free fuel, 90 per cent of the programme's funding.

Citizens Energy, the Boston-based non-profit that oversees the programme that gave the free fuel. Joe Kennedy, the president of the programme is a former Congressman and nephew of the late President John F Kennedy.

"Citgo has been forced to re-evaluate all their social programmes, including the heating oil programme," Kennedy said on the group's website.

The Citgo donations have been controversial because of the perception that Chavez, a notorious anti-American, was using the programme for propaganda purposes. Kennedy has countered that the US gets much of its oil from far more controversial nations, such as Saudi Arabia.

The final decision on the programme's future is in the hands of Citgo and PDVSA, and Kennedy therefore urged people affected by its suspension to write to Venezuela's leftist president, Hugo Chavez, to tell him their stories and thank him for the generous donation of heating oil.

Oil-rich Venezuela launched the initiative in 2005 when, after the devastation caused by Hurricane Katrina along the Gulf Coast, several U.S. lawmakers called on oil companies to donate 10 per cent of their record profits to those affected by the disaster.

Since then, due to the strong demand for the programme, the amount of heating oil delivered to poor households in the United States has grown steadily.

Between 2005 and 2007, the number of families that benefited from the programme in 23 states grew from 100,000 to 224,000, according to figures from the Venezuelan Embassy in Washington.

Citgo also supports other social programs in the United States, such as the distribution of energy-efficient light bulbs to low-income homes in cities including Houston, Washington, Corpus Christi, Texas and Lake Charles, Louisiana.

Chávez, who is seeking support for a referendum that would lift the Venezuelan constitution's term limits so he could run for re-election in 2012, is focusing more on making ends meet for people in Venezuela, not for the citizens of US.

Analysts say Venezuela needs oil prices of $60 to $90 a barrel to balance its budget. Yesterday the price of a barrel of crude oil for February delivery closed at $48.81 on the New York Mercantile Exchange.

Venezuela is the world's fifth largest oil exporter, and a founding member of the Organization of Oil Exporting Countries and remains key supplier of crude oil to the United States despite the mutual antagoniosm between the two countries.

Oil accounted for about 93 per cent of Venezuela's export revenue in 2008, up from 69 per cent in 1998, when Chávez was first elected.