Caribbean states to benefit further from PetroCaribe

Golding told Parliament that this was one of the changes to the financial terms announced by President Hugo Chavez at the Fifth Extraordinary PetroCaribe Summit held in the western city of Maracaibo in Venezuela over the weekend.

He said that Caracas, after considering the unprecedented increases in global oil prices which have more than doubled within the last 10 months, “agreed to increase the deferred financing portion to 60 per cent once the price exceeds US$100 per barrel".

“Further, should the price exceed US$200 per barrel, the deferred portion will be increased to 70 per cent,” he said, noting that the decision would ease the demand for the foreign exchange required to pay oil import bills," Golding said.

Under the existing PetroCaribe arrangement, once the price of oil exceeds US$100 per barrel, 50 per cent of the cost of these imports is deferred for a period of 20 years at a concessionary rate of two per cent.

Golding said the summit also considered an appeal made by St. Vincent and the Grenadines and Jamaica regarding the cost of fertilizer and the negative impact this was having on the agricultural sector and the efforts to improve food security.

“Earlier representation by the Ministry of Agriculture had resulted in an undertaking by the Venezuelan state-owned company, Petroquimica, to provide a five per cent discount on the price of urea,” he said.

“However, based on the submissions made at the summit, the Government of Venezuela has agreed to make available to PetroCaribe member states 100,000 tonnes of urea per annum at a discount of 40 per cent of prevailing market price. This discount will provide a significant reduction in the cost of inputs to the local manufacturer.”

During the summit, President Chavez also took a decision to establish a fund to support PetroCaribe member countries in expanding agricultural production and improving food security.

The Venezuela leader said his country would contribute US$0.50 to the fund for every barrel of oil exported, resulting in an estimated contribution of US$760 million per year.

Golding said a special meeting of Agricultural Ministers will be held in Honduras on July 30 to work out the details on the allocation of the funds.

The Prime Minister said that Jamaica would contribute US$5 million to the ALBA PetroCaribe Fund which was established to finance development projects in member countries, with special emphasis on poverty reduction.

“The Government of Venezuela started the Fund with a contribution of US$50 million and urged other member countries to make voluntary contributions to expand the Fund. To date, no other country has made any contribution,” Golding said.

“We believe we have an obligation to make our contribution to the Fund. It is not fair to the Venezuelan Government for us to be going constantly hat in hand without reciprocating the goodwill shown by Venezuela by making our contribution to the Fund.

“I was therefore pleased to advise President Chavez that Jamaica will be making a contribution of US$5 million to the Fund and this amount will shortly be forwarded. This amount will be paid from profits realised from the investments made by our own PetroCaribe Fund,” he added.

During the summit, Guatemala became the 18^th country to join the PetroCaribe initiative.
Antigua and Barbuda, Bahamas, Belize, Cuba, Dominica, Grenada, Guyana, Haiti, Jamaica, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines and Suriname are among the PetroCaribe member states.

Trinidad and Tobago and Barbados are the only Caribbean Community (CARICOM) countries that have declined to participate in the initiative.

CMC/dmb/pr/08