By L. K. Hewlett
The Federation is set to benefit from the signing of another PetroCaribe agreement.
The Federation and the Bolivian Republic of Venezuela have signed a second agreement to activate the terms of the first agreement, which symbolised a fuel arrangement between the two cou ntries.
CARICOM member states and others such as the Republic of China, the Dominican Republic and Venezuela signed the first agreement June 29.
Oaklyn Peets, Permanent Secretary in the Ministry of Public Works, Utilities, Transport and Posts said there had been a meeting with the stakeholders prior to the second signing, to ensure that the supply agreement would materialise.
“There has also been a meeting with the representatives from Antigua and Barbuda to discuss the possibility of that country being a transhipment point to St. Kitts,” Peets said in a press release.
Vice President of Petroleos de Venezuela, S.A. Alejandro Granado Ravelo agreed that the petroleum arrangement would activate the PeroCaribe initiative.
This way the government and people of St. Kitts-Nevis would benefit and it will enable access to energy ‘at more fair conditions’.
The process will continue with a meeting of representatives from Sol Group, Grenada, Shell West, St. Vincent and the Grenadines and PDSA on July 5.
Minister of Public Works, Utilities, Transport and Posts, Dr. Earl Asim Martin outlined the financial arrangements specified in the agreement.
“If we purchase $100 million in petroleum products via the agreement, $60 million would have to be paid upfront. The federal government could then invest the remaining $40 million in social programmes. The agreement enables the repayment of the $40 million over a period of 25 years at a 1 percent interest rate,” Martin said via press release.
In speaking with the Observer, Minister Martin explained the benefits of this agreement as it affects the citizens of St. Kitts-Nevis.
“This agreement would basically allow for the ‘freeing up’ of federal funds. Under other terms we would have had to pay all the monies up front for these petroleum products. By only paying 60 percent upfront, we are left with the remaining 40 percent to channel into the community via social programmes for schools etc,” Martin said.
Martin also noted that the agreement with Venezuela should not have any negative repercussion regarding diplomatic relations with the U.S. He explained that the US themselves also bought petroleum products, which include gas and diesel, from Venezuelan Petroleum companies such as CITGO, a Venezuelan Petroleum Company based in the U.S.
When asked if citizens woul d see lower fuel prices under the PetroCaribe agreement, Minister Martin explained that the government would be purchasing the petroleum products at the same rate as it had before.
“Venezuela forms part of OPEC and OPEC controls the price of these products on the international market,” Martin said.
