Venezuela has formally suspended shipments of premium fuel to Belize, with the last shipment of premium fuel having arrived last week via Curaçao, on Monday, January 26, 2015.
John Mencias, deputy chairman of Alba PetroCaribe Belize, the joint venture company which Belize and Venezuela had established to manage the PetroCaribe program, told Amandala that the shipment left port on January 22 and arrived in Belize 4 days later, on January 26.
Belize had ordered 9,000 barrels of premium gasoline, as well as gasoil (diesel), regular fuel and kerosene from the refinery Isla, a subsidiary of the state-owned Pedevesa (Petróleos de Venezuela S.A.).
Mencias explained that it is still Puma Energy which is responsible for importing fuel into Belize. They had agreed to purchase all Belize’s fuel imports through PetroCaribe, as long as Venezuela could supply it, but now, since Venezuelan authorities have indicated that they are unable, Puma is able to get premium fuel from other sources, Mencias explained. He indicated that the company may already be moving to do so, but Mencias is optimistic that Puma will get the fuel from an alternate source.
Despite numerous attempts, we could not reach Freddy Flores, deputy general manager of Puma Energy in Belize, to verify if plans are already in place to procure premium fuel from other sources.
Since the premium fuel will be sourced from elsewhere, the payment terms for the purchase of such fuel will be different from those of the PetroCaribe deal and Government will not be able to retain a portion of the proceeds through the long-time financing arrangement. Most likely, the bill for premium fuel will have to be paid under normal commercial terms, but without substantial price changes to consumers, since Venezuela charged Belize at world market prices.
Mencias explained that with the fall in market prices for crude, and the resultant fall in pump prices, although Government has been receiving fewer dollars via the PetroCaribe arrangement, consumers are getting to keep more money in their pockets.
Due to current prices, Government pays Venezuela 60% of the fuel bill but gets to retain 40% as a loan financed by that country at a rate of 1% for social programs. That means that for January 2015, the Government would have kept roughly $5 million as the financed portion for spending at home, and it would have paid Venezuela roughly $8.8 million.
However, Mencias notes that this is about half of what would have been the tab when the price of fuel was around $100 a barrel.
The real story, though, Mencias said, is the $160-$180 million which consumers will have saved on an annual basis, assuming that low prices continue to hold, but he questions what consumers, including the productive sector, are doing with those savings.
“What should have happened is that the productive sector should be producing products more cheaply,” he suggested.
He said that when pump prices are low, consumers get the direct benefit at the pumps, but the Government still has the smaller portion which Venezuela continues to finance for social programs.
Mencias says that while pump prices are falling, Government borrows less from PetroCaribe – which, he said, is how the program was designed.
He said that Belize gets roughly 20 fuel shipments a year at intervals of 2 to 3 weeks.
Mencias noted that consumers who had begun to switch to regular fuel switched back to premium when prices fell substantially in December. However, he maintains that the quality of regular fuel obtained from Venezuela is suitable for most vehicles in Belize.Amandala