Eye on the Caribbean

Caribbean nations ponder PetroCaribe implementation

Posted on Tuesday 9 May 2006

AlterPresse, 9 May 2006

As the government of St Lucia announces that it may have no other choice than to raise the price of fuel again, people across the Caribbean region are wondering how and when they will enjoy the benefits of participation in Venezuela’s PetroCaribe programme.

Most Caribbean countries have signed up to the PetroCaribe programme, through which Venezuela’s state oil company sells fuel on preferential terms, but the details of the implementation of the deal have yet to be agreed.

One of the main issues is how small Caribbean states can store the Venezuelan oil. As Dominica’s energy minister, Reginald Austrie, says, "One of the difficulties is the problem of storage capacity within the islands, and that is due to the fact that most of the operating petroleum companies in the region are privately-owned, except for St. Vincent and the Grenadines...The issue of storage is one that is confronting all the islands. As a matter of fact, the only island that has been able to take advantage so far is St Vincent."

Heads of government of the Organisation of Eastern Caribbean States (OECS)* met in Antigua at the end of April to discuss ways to address the problem, and following the meeting, St Lucia’s Prime Minister, Kenny Anthony, said, “There is now a proposal on the table to allow for the petrol from Venezuela to be stored in Antigua (and) to be distributed to the rest of the Caribbean.â€

Until that proposal becomes a reality, some countries are looking for ways to speed up PetroCaribe’s implementation. Austrie said that Dominica had identified a suitable site for a storage facility that could accommodate up to 12 storage tanks. "We have some Venezuelan engineers right now doing surveys, topographical works, and soil tests in order to accommodate those 12 tanks," Austrie said.

The other main issue is the one of price. International fuel prices have been steadily increasing for some time, and the PetroCaribe programme had raised expectations that prices would be reduced in the Caribbean countries participating in the initiative. However the prices are fixed by OPEC (the Organisation of Petroleum Exporting Countries), of which Venezuela is a member, and therefore the countries participating in the PetroCaribe programme must pay the international market rate, even if the repayment of the full charges is deferred to a later date.

As Dominica’s Austrie said, ""The product cannot be delivered to you at a lower cost than what is agreed to upon by OPEC, and so we have to devise a mechanism where any benefit accrued can be seen by the masses of the people within the region."

Haiti’s president-elect, René Préval, has said that his country’s participation in the PetroCaribe programme will not result in lower fuel prices at gas stations, but that the revenue saved thanks to the deal’s preferential terms will be used to fund development projects.

*The OECS is a seven member grouping comprising Antigua and Barbuda, Dominica, Grenada, Montserrat, St Kitts and Nevis, St Lucia, and St Vincent and the Grenadines.

Source: Caribbean News Agency