By: Staff Writer
July 8, 2022
The Prime Minister of St Vincent and the Grenadines, Dr Ralph Gonsalves, said at the closing ceremony of the 43rd Regular Meeting of the Heads of Government for CARICOM that the Venezuelan PetroCaribe arrangement yielded “important financial benefits” to all of the participating countries and calls for an end to the US sanctions against Venezuela.
Soaring crude oil prices are bringing Caribbean countries to their knees. In many countries, the price of gasoline is well over US$6 per gallon, signalling the highest it has ever been for this generation of people.
Dr Gonsalves noted the energy diversification strategies in the region, with some opting to go green and use solar in many respects. But he said the “obvious” answer to the energy crisis in the region was to re-engage Venezuela with the PetroCaribe arrangement despite the US sanctions against the country.
D Gonsalves said: “In addressing the energy question, I don’t want us to think that we are beginning with a blank slate. It’s not tabula rasa. Already existing in CARICOM is a regional energy policy. There’s a CARICOM energy policy, there are sub regional energy policies like for instance, the organization of Eastern Caribbean States, and each country has a national energy policy and the energy policy addresses the pre-existing before we arrived here, in ensuring Suriname focused on renewable energy and also an energy efficiency.”
He also noted there are a lot of initiatives and coordinated policies dealing with energy, from renewable energy with regard to hydro, solar, wind, geothermal and energy efficiency matters, concerning LEDs, particular types of equipment, and so on.
The foregoing issues notwithstanding, he also said that the real “urgency” of the situation the Caribbean is faced with now is, “the manipulation of the market addressing oil production and distribution exacerbated by the Russia/Ukraine war and clearly the prices are rising.”
The rising price of oil has implications for all sectors of Caribbean economies from imports, to agriculture to a wide range of other matters.
Petrocaribe is an oil alliance involving 18 Caribbean member states. The alliance was founded on June 29, 2005 in Puerto La Cruz, Venezuela, by former Venezuelan President Hugo Chavez with Venezuela offering the other member states oil supplies based on a concessionary financial agreement.
The payment system allowed for the purchase of oil at market value for 5 percent to 50 percent up front with a grace period of one to two years; the remainder can be paid through a 17-25 year financing agreement with 1 percent interest if oil prices are above US$40 per barrel.
Dr Gonsalves also said: “In light of these new circumstances. There’s one obvious one with the supply of energy through the Petrocaribe arrangement, which is very favourable to several countries in the Caribbean, including, especially so, the independent countries of the OECS but other countries within CARICOM.
“As you are aware, the unilateral sanctions by the United States administration imposed during the time of President Donald J. Trump in relation to Venezuela brought for all practical purposes, the Petrocaribe arrangement to an end this arrangement delivered important financing benefits to countries participating. But the agreement was brought to an end because the sanctions would have affected the actual shipping arrangements and the financialization behind this the monetary system, the payment in dollars and all the rest of it.
As a result of this the CARICOM has made the decision to “call an end to the sanctions” the US imposed on Venezuela that affected the PetroCaribe arrangement. He added: “Because of what is happening in Europe, we had United States of America wants to give the Europeans a special carve out in relation to the sanctions, unilateral as they are in relation to energy products out of Venezuela.
The Nicolas Maduro regime has been under various US imposed sanctions, which started in 2015 under former US President Barack Obama and intensified under his successor, Donald Trump.
The US government has labelled the Maduro government a “threat” to its national security and his presidency illegitimate following Venezuela’s 2018 election that American observers have called deeply flawed and which led to the country’s 2019 presidential crisis.
Calling out US hypocrisy on their own sanctions, Dr Gonsalves, said: “We see the Americans themselves are going down to Caracas on two occasions now, to see if they can make arrangements to get additional energy products.”
Dr Gonsalves also said that he personally went to Venezuela to speak to President Nicholas Maduro earlier this year to get an agreement on the resumption of the PetroCaribe deal and he said that that Venezuela agreed to a “35 percent” reduction on oil off top.