Deputy Managing Director of the International Monetary Fund (IMF) Agustin Carstens recently cautioned during a regional press conference in St. Kitts that the region needs to be cautious about its approach to the Petrocaribe initiative.
Mr. Carstens said, “I think that countries have to analyse it carefully and really they have to evaluate the convenience of this offer in terms of the global macroe-conomic picture.”
He indicated that the initiative – which is being sponsored by the Venezuelan government – could mean more debt for regional nations.
The Bahamas has not signed the deal, although Trade and Industry Minister Leslie Miller has continued to tout its benefits.
As part of the arrangement, Venezuela would provide fuel to the region under special payment terms.
Thirteen Caribbean countries have so far signed onto the deal.
H. Vincent Coleby, who heads the government’s fuel usage committee, has said The Bahamas would benefit from Petrocaribe.
“We would pay the market price of the petroleum products,” he has explained. “However, you do not have to pay the full amount. You pay only 60 percent of the value of the products that you receive. The other 40 percent of the value of the product is retained in bank accounts in The Bahamas, managed by The Bahamas and used by Bahamians at the discretion of the government through the National Energy Agency.”
Mr. Coleby added, “Let us say The Bahamas will use about $200 million worth of products. Out of that $200 million, you would be required to remit to the Venezuelans $120 million. The other $80 million would be held in The Bahamas in the bank account of the National Energy Corporation and to be used at the discretion of The Bahamas government. However, [what the Venezuelans] would like to see happen is that you address your social development concerns.”
Only recently, Minister Miller told The Bahama Journal that Petrocaribe is still the best solution to high energy costs.
“I still believe that at the end of the day Petrocaribe would indeed be of great assistance to the people of The Bahamas,” Minister Miller said.
The Bahamas signed onto the framework agreement in Venezuela on the June 29. But in September, representatives did not sign the final document to activate the agreement.
The minister said he is also optimistic about the establishment of a National Energy Corporation, which is a vital part of Petrocaribe.
He had promised that the corporation would be established by September, something he said can happen easily.
Minister Miller pointed out that one of the recommendations from the government-appointed fuel usage committee is that the NEC be formed as a company and not a corporation.
He said a company would be able to make decisions quicker.
“I guess it would be called The Bahamas National Energy Agency (NEA),” Minister Miller said, “a quasi government agency just as Bahamasair is.”
He added, “The Government of The Bahamas has no intention of going into the oil business under the NEA. We are only getting it at better prices to sell to the Bahamian people.
“The most important aspect of this Petrocaribe [agreement], in addition to what breaks we would get from Venezuela, is really cutting the margins. I’ve stated that for three years now, that the margins must be decreased.”
When he spoke at the Jamaica summit back in September, Minister of Foreign Affairs Fred Mitchell said The Bahamas was studying the full parameters of the initiative and will “in due course” determine what steps it will take in this matter.
“The PetroCaribe Initiative is clearly part of the process of the sovereign nations of the region seeking to chart their own course,” he said at the time.
From: The Bahama Journal
