On September 8, 2012, an oil tanker named the Miramis, arrived in Belize City with fuel from Venezuela’s national oil company, PDVSA.
The UDP Administration has reactivated a long standing Petrocarib agreement that has been laying dormant for 6 years. Petrocaribe is compsed of 14 countries (including Venezuela) that signed the Petrocaribe Energy Cooperation Agreement on June 29, 2005 as well as Haiti, which signed the agreement on May 14, 2006.
State entities importing oil under Petrocarbe have a two year grace period and a 17 year timetable for repayment at a two percent interest rate when the price of oil is below USD$40 per barrel. When the price of oil is above USD$40 the payment period is 25 years and the interest rate drops to one percent.
Under Petrocaribe, Venezuela will only deal directly with state entities, in Belize’s case, that is Belize Petroleum and Energy Limited, which signed an agreement on June 9, 2006 to form a joint venture called ALBA PetroCaribe (Belize Energy) Ltd.,which will handle fule shipment to Belize. This took place under the PUP Administration.
PDV Caribe will have a 55 percent equity stake in the company with Belize Petroleum holding the remainder. The joint venture will handle shipments of crude oil, refined products, and liquefied petroleum gas at the equivalent level of 4,000 barrels of oil per day. PDV Caribe also indicated that it would assist Belize with the construction of a 50,000 barrel storage facility and improved port facilities. Granado was quoted on the PDVSA website as stating PDVSA is considering the possibility of processing crude oil in Belize. Granado noted Belize produces 2,500 barrels of crude oil per day, which covers 85 percent of its needs, but does not have any processing facilities.
Now, here is something that raises my curiosity: We are now importing fuel via a State owned company – BPEL, and will have a two year grace period, and a payment period of 25 years with an interest rate of 1%, when price per barrel is above USD$40 (as at September 14, 2012 price per barrel is USD$105.07). Thus, in actuality the Government of Belize does have the capacity to easy the pressure on Belizeans at the gas pump, and give the Tourism Sector a well needed stimulation – which is currently pricing itself out of being competitive. However, my understanding is that Government of Belize will NOT be lowering prices at the pump, thus in essense squeezing that money from my wallet today, and sticking my daughter with the bill over the next 25 years. Damn clever way to get well needed money into that consolidated funds today and have some other poor sap of a Prime Minister and Political party down the road, try to explain to Belizeans why they are still paying high fuel prices, and why, if we had the flexibility of paying back for the oil over 25 years, why we didn’t get lower prices at the pump over that period of time.