By Floyd French
Observer Reporter
(Basseterre, St. Kitts) – A planning committee for the fifth Petro-Caribe Summit in St. Kitts in June, 2008, will meet soon to begin its work, according to Permanent Secretary in the Ministry of Public Works, Utilities, Transport and Post, Mr. Oaklyn Peets.
Mr. Peets outlined the major benefits of the Petro-Caribe agreement.
The programme “facilitates government cash flow. It offers more flexible payment terms,” he said. The agreement, according to Peets, would give government the option to defer payment on 40 percent of its fuel purchase for up to 25 years.
In addition, the government will be able to access a portion of the funds from the repayments for social development projects.
“Some of that 40 percent goes into a fund from which we can extract or access a portion to fund social projects that emanate from within the community, projects that are sustainable and assist development,” Peets said. The repayment interest rate on the 40 percent is 1 percent per annum.
Mr. Peets compared the system of purchasing fuel before Petro-Caribe to the new system under the Petro-Caribe agreement.
Under the Texaco deal, if payment were in default supplies would be disrupted, he said.
“Granted, payment by government is guaranteed, but our supplies would be disrupted because they have timelines and they work according to those strict timelines. And sometimes it is not always, say to meet those timelines in a way that would be keeping with the modus operandi and payment plans of the service providers,” Mr. Peets said.
On the other hand, the Petro-Caribe agreement’s flexible payment plan allows the government to meet the 60 percent of cost and pay the remaining 40 percent over 25 years.
Mr. Peets also pointed out that Venezuela will construct oil storage facilities.
“Venezuela is to build our farm tanks. We are looking at a project in the tune of US$24 million,” he said. The storage facilities will have the capacity to hold 34,000 barrels of fuel.
The first shipment of diesel from Venezuela, sent under the Petro-Caribe agreement, arrived on Dec. 3 2007, Minister of Public Works, Utilities, Transport and Post, Honourable Asim Martin said at a press conference last week.
To date, five shipments have been received, totalling 20,000 barrels, he said.
Mr. Peets summed up the overall benefits of the new fuel agreement as “profound.”
He envisions that Petroleos de Venezuela, operating in the Federation as PDV St. Kitts-Nevis Limited, will expand energy supply beyond diesel for electricity generation, Mr Peets said.
“Very slowly and surely it will continue to move deeper into the communities where it will provide maybe LPG, where it will provide gasoline, where it will provide aviation fuel. What you are looking at in the long term is the proliferation of gas stations and outlet under the auspices of PDV St. Kitts-Nevis Limited,” he said.
