Details scarce on Petrocaribe deal

Belize is anticipating significant savings on the cost of petroleum under the recently signed agreement between Venezuela and thirteen Caribbean countries. At least that’s the word from Cabinet. In a statement released today and included in the regular press briefing on yesterday’s Cabinet session, government said that as a signatory to the Petrocaribe Energy Cooperation Agreement Belize would gain access to fuel products from Venezuela at lower cost, as well as on favourable credit terms. The lower costs would come, not from subsidized pricing, but from cutting out the middlemen on trading, freight, and brokering services. This would be accomplished through the creation by Venezuela of a network of ships and storage facilities throughout the Caribbean.

While the arrangement sounds good in theory, there were precious few details emerging from today’s briefing. Minister of Foreign Affairs, Tourism, and Information, Godfrey Smith, told reporters this morning that it was now up to each of the signing countries to conduct bilateral negotiations on the plan’s implementation. In the case of Belize, this will be done by a three-man team led by Energy Minister Vildo Marin and including ministers Joe Coye and Servulo Baeza, along with technical support from the Ministry of Finance, Public Utilities Commission, and Belize Electricity Limited.

At present, Esso Belize Limited is the sole bulk importer of fuel in Belize. Esso then distributes its products to Shell and Texaco, as well as its own dealers for retail sale. How the Venezuelan deal will affect arrangements with Esso is not clear. At present the company operates the only bulk storage facility in the country and the creation of a second complex would seem to be a waste of resources. The trick for government will be to make any transition to a new and lower cost petroleum arrangement a smooth one. Otherwise, the line at that lone PEMEX station is going to be a long one.