BELIZE CITY, Fri. Sept. 15, 2017–In an announcement made earlier this week, the Alba PetroCaribe office, a joint venture arrangement between the Government of Belize and the Government of Venezuela, announced that they had decided to suspend imports from Venezuela, as supply problems have actually been causing prices on the domestic market to remain high.
According to a news release from the company, it has decided to suspend purchases of petroleum products from PDVSA (the Venezuelan state-owned oil and natural gas company) under the PetroCaribe Agreement with immediate effect.
“We have been encountering a number of problems with maintaining a reliable supply of products from PDVSA. This has, among other things, resulted in much higher unit costs of freight when Puma has been forced to make last-minute arrangements to truck products overland and when vessels are brought in half-loaded,” it explained.
Although the PetroCaribe accord, under which fuel imports are sent from Venezuela to Belize, goes back to 2005, it was back in September 2012 that Belize began sourcing all fuel products – gasoline, diesel and kerosene – from that country. However, in February 2015, it was announced that Belize would no longer be obtaining premium fuel from that country, due to supply problems, and so Belize, which had traditionally imported from the US market, had to return to that source.
The advantage of the arrangement with Venezuela was said to have been two-fold: the first was that under the program, the Government of Belize could retain some of the funds from payments for fuel as a long-term concessionary loan. The second was that the quality of the regular fuel was said to have been above the usual standard, giving consumers better fuel for their dollars.
However, even supplies of regular gasoline have recently been short. The situation has been exacerbated by persistent socio-economic turmoil in the South American country.
According to the Alba PetroCaribe office in Belize, “We have also been informed by PDVSA that, at times, they have had to purchase on the spot market to meet their commitments to us: This is definitely not what was intended by the PetroCaribe program.”
The parties express their gratitude to the Bolivarian Republic of Venezuela and PDVSA for the arrangement, and indicated that the situation could be revisited down the road to see if purchases from that country can be resumed.
We note that back in 2014, total imports by Belize under the PetroCaribe program were billed at $450 million since the start of the program, with the bulk of it (BZ$360 million) being imported between 2012 and 2014. However, supplies were substantially reduced from 2015 onward.