No More Petro Oil

Prime Minister Dean Barrow’s held a Press Conference in Belize City on May 16, 2018 in Belize City. He conceded it has been a while since he fielded questions from the media and he spoke about a variety of topics including the rising cost of fuel. “We are going to be in for a difficult time when it comes to fuel prices because the global price of oil in increasing at a rate that small countries such as ours, is alarming. There are several reasons to that but basically there is huge and increasing global demand as the pace of global economic growth accelerates.” Prime Minister Barrow referred to global issues stemming from OPEC and pending US sanctions on Iran for the rise in fuel acquisition costs as well as a decrease in production in Latin America. “Venezuela is also where they are down to just under one million barrels per day which is a 41 percent drop from the previous year. With the threat of additional sanctions by the U.S. by Venezuelan contribution to the global supply can plummet even more.”

“When the petro Caribe arrangements were in place. There were certain margins that were agreed with PUMA, in shorthand, by way of incentives to get them to source fuel from PDVSA because, of course, there were innumerable benefits to Belize, in consequence to using Petrocaribe and PDVSA as the source for our fuel supplies. We stopped placing orders with Venezuela. I will not agree with anyone who would say that means ‘the Petrocaribe Program is at an end.’ Because as the Venezuelans will be the first to tell you Petrocaribe is not just oil, they will point to Operacion Milagros, a program under which people with vision problems can take surgeries in Venezuela. But we have stopped sourcing fuel from Venezuela.”

All fuel will now be sourced from the Houston area of the USA. However, the PM also pointed out that sanctions placed on Venezuela by the USA also made banking problematic for the relationship between Belize and #Venezuela. Prime Minister Barrow said “No bank will handle any financial transaction that sees us attempting to send money to Venezuela to pay for fuel supplies. So that was a key factor for us to source the fuel from the USA or such other places that PUMA might in fact suggest. They are the ones that will now do the sourcing. When the Petro Caribe agreements were still in place, remember we had APBEL which is the joint venture Company between Belize and Venezuela, place the Puma orders with PDVSA or PDVSA Caribe. Indeed there were corresponding banking issues and those issues contributed in great measure to the decision not to any longer source-fuel from Venezuela. We are having difficulty servicing our debt with Venezuela because no bank will remit payments to Venezuela and they don’t care that it has nothing to do in the case of debt servicing with paying for any supplies of anything. It is simply trying to honorably deal with an obligation that has already accrued. That is the extent of the correspondent banking issue effect.”

Jose Sanchez