Washington, Nov. 26 (PTI): In an apparent political jab at the Bush Administration, Venezuelean President Hugo Chavez, has ordered a petroleum company owned by his country to supply more than 12 million gallons of heating oil to the poor in US cities of New York and Boston at 40 per cent below market prices.

The first delivery of Chavez's shipment has already reached a home in Boston and soon tens of thousands of families as well as hospitals and homeless shelters will be getting the discounted heating oil from Venezulean company Citgo, media reports here said.

Washington on its part said Citgo is incorporated in the United States and is therefore free to go about deciding how to distribute oil in this country, the Washington Times said.

"We understand that (Citgo) is incorporated in the United States and is free to decide...as it wishes how it distributed oil in the United States," State Department spokesperson Sean McCormick. said.

The United States receives about 10 per cent of its oil from Venezuela.

Chavez who has been at odds with President George W Bush came up with his discounted heating oil programme for New York and Boston this August when gas prices were at record highs. Since then the prices have come down but serious concerns remain on heating oil bills this winter.

"Our federal government has made billions of dollars just this year on the royalty payments the oil companies pay," said Joe Kennedy the Chair of Citizens Energy, one of the outfits that will be distributing the discounted Venezuelan oil.