An international research and information organization has blasted two Caribbean countries who were critics of the PetroCaribe proposal, claiming in a newly released analysis that they were motivated by selfishness.
The Council On Hemispheric Affairs [COHA] also backed the plan by Venezuelan President Hugo Chavez which is based on offering discounts on oil to contracted countries who need only pay a percentage of the market price with the remaining cost converted into long term, low interest rates.
Bahamas Minister of Trade and Industry Leslie Miller signed a framework agreement for the oil deal in Venezuela last June. But The Bahamas has not signed the final document to activate it.
The government has since explained that it is studying the full parameters of the initiative and will “in due course” determine what steps it will take.
Under the plan for instance, when market prices for oil rise above $50 a barrel as is the current situation, participating countries will be allowed a 40 percent discount that will accrue as a 25 year, one percent interest loan. If prices rise above $100, the discount will rise to 50 percent.
COHA Research Associate Kaia Lai wrote that despite the objections raised specifically by Trinidad and Tobago and Barbados, PetroCaribe is the best offer on the table for the region and could prove to be the best exit from the region’s current misery.
“PetroCaribe will offer 15 islands the best hope for riding out the energy crisis and cannot be repudiated as some regional naysayers would very much like to see happen,” the report noted.
Under the agreement, which was signed by 15 countries last September, Venezuela would cover shipping costs, aid in the development of distribution infrastructure and storage sites, contribute to the formation of state controlled facilities and provide fuel efficient systems in member countries.
But in the evaluation released this week, Lai referred to the “nasty rifts” that have developed within CARICOM and classified Barbados’ decision not to sign the agreement as being based on a smattering of valid reasons and what appears to be “an ample dose of exported Washington-influenced paranoia.”
Barbados produces some oil but far less than it consumes and has an existing agreement with Trinidad and Tobago to refine that oil. Concerns about maintaining that relationship have contributed to the country’s opposition to PetroCaribe as Barbados claims that any changes to the existing supply chain are only likely to create complications.
COHA’s analysis also had a hardline view of the opposition from oil-rich Trinidad and Tobago whose prime minister has advised neighbouring nations this week not to count on the PetroCaribe oil deal with Venezuela to solve their energy needs.
Trinidad and Tobago’s Prime Minister Patrick Manning, who heads the 15-nation Caribbean Communities trade bloc, told reporters the agreement would push private companies that have traditionally handled oil storage to quit the region. He also expressed concerns that the oil industry and the refining industry in particular would suffer a setback.
Trinidad and Tobago supplies some 60,000 barrels of oil daily to other Caribbean nations.
But Council on Hemispheric Affairs conceded that the oil plan is not completely flawless.
“PetroCaribe is not without flaws and logistical hang-ups, yet it remains the most concrete proposal on the table to alleviate the region’s suffering,” noted the report. “Chavez’s intention is patently not self interest or glorification as he is not exactly aiding a region with significant global diplomatic or economic clout.”
A proposed National Energy Corporation [NEC] figures prominently in plans by the Government of The Bahamas to drive down energy costs. A report from the fuel usage committee was to have been completed ahead of the establishment of the NEC.
H. Vincent Coleby, who heads the government’s fuel usage committee, has said The Bahamas would benefit from PetroCaribe. But the International Monetary Fund has warned that the deal could mean more debt for regional nations.
The Bahama Journal
