It was a good long run for the Barrow administration, but, tonight, it's official: the Government is saying goodbye to the Petrocaribe program - for the time being, at least. Why? Well, with the instability in Venezuela, getting fuel from their state owned oil company, PDVSA, has proven increasingly difficult, and it's driving up pump prices.
An official release from the Alba Petrocaribe office says "APBEL has decided to suspend purchases of petroleum products from PDVSA under the PetroCaribe Agreement with immediate effectâ��we have been encountering a number of problems with maintaining a reliable supply of products from PDVSA. This has, among other things, resulted in much higher unit costs of freight when Puma has been forced to make last-minute arrangements to truck products overland and when vessels are brought in half-loaded. We have also been informed by PDVSA that, at times, they have had to purchase on the spot market to meet their commitments to us: This is definitely not what was intended by the PetroCaribe program. We are very grateful to the Bolivarian Republic of Venezuela and PDVSA for all they have been trying to do to keep their promises to us under the PetroCaribe Program; but it does not make sense to force this arrangement under these circumstances."
And, so with that - the Petrocaribe program - which generated approximately 450 million dollars in funding for the Barrow Administration over 4 years is just about finished for Belize. in 2012, The UDP government re-activated what had originally been a PUP program and managed to do what the PUP could not: generate and harness huge inflows of revenue derived from fuel imports from Venezuela. With it, the UDP were able to spearhead a road infrastructure and sports facilities program of unprecedented scale, and make massive - some say indiscriminate - outlays in public spending - which, to hear the PUP tell it - won them a few elections.
So what's next? Well, the release says that the Government of Belize, PDVSA, Puma - which currently imports fuel - and APBEL will be meeting this month to determine the possibility of resuming supply from PDVSA in the near future, or decide on a suitable way forward. Our information tells us it will likely be the latter - since instability continues in Venezuela.
The release says, quote, "In the meantime, Puma has already made alternative arrangements to maintain an uninterrupted supply of petroleum products to Belize."Channel 7
=============================Petrocaribe Purchases Suspended! Local Agent Says Venezuela Supply Not Reliable
A release issued late this evening dropped a bombshell - Petrocaribe has stopped rolling, for now and quite possibly forever. The decision comes on the heels of an announcement by the Government just a week ago that it plans to raise fuel prices, which it blamed on damage to oil refineries in Houston, Texas, due to Hurricane Harvey.
For this reason, the fuel companies had been trucking in refined oil overland from El Salvador at greater prices. But the long-standing agreement with Trafigura/Puma and Petroleos de Venezuela S.A. under the Petrocaribe is tonight suspended, according to a statement from Alba Petrocaribe Belize Energy Limited (APBEL).
And it appears to be the Venezuelans' fault. The APBEL release states that since early this year, there have been a number of problems with maintaining a reliable supply of products from PDVSA. This has, among other things, resulted in much higher unit costs of freight since Puma has been forced to make last-minute arrangements to truck products overland and when vessels are brought in half-loaded.
APBEL states that it has been informed by PDVSA that, at times, they have had to purchase on the spot market to meet their commitments to Belize which was not intended by the Petrocaribe program. The release says that later this month, a meeting will be held to determine the future of the program and the choices are stark - possible resumption or deciding on a suitable way forward. If indeed this is the end, it comes after an unprecedented decade-long run of borrowing at minimal interest rates, with figures of close to five hundred million dollars quoted.
What we know for sure is that as of February, 2016, according to Financial Secretary Joseph Waight, Belize had but fifteen million dollars left in Petrocaribe - and that was before the massive compensations due for Belize Telemedia Limited later in the year. It is expected that the General Manager of APBEL, John Mencias, will be providing further details on Friday.Channel 5