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Jamaica's PetroCaribe debt stands to drop significantly

Published:Wednesday | January 14, 2015 | 9:37 AM

Jerome Reynolds, Staff Reporter

KINGSTON, Jamaica:

Co-Chair of the Economic Programme Oversight Committee (EPOC), Richard Byles, says Jamaica's PetroCaribe debt stands to drop significantly due to reductions in the price of oil on the global market.

Up to December, the country's stock of PetroCaribe debt stood at about US$3 billion.

The PetroCaribe programme, an agreement between Venezuela and some Caribbean territories to purchase oil on preferential terms, allows the Government of Jamaica to convert 40 per cent of payments annually to a loan repayable over 25 years.

The price of a barrel of oil has fallen drastically from US$100 last April to about US$50.

According to Byles, as a result Jamaica's Petrocaribe debt could fall by some US$300 million.

He explains that when a barrel was at US$100 PetroCaribe paid 60 per cent of the cost while Jamaica paid the other 40 per cent.

He says now that the cost of a barrel of oil has moved down to US$50, this will result in savings of about US$35.

Byles says this will translate to millions in debt savings.

Meanwhile, the EPOC co-chairman says the pace of the devaluation of the Jamaican dollar is expected to slow down as a result of the downward trend of inflation.

He says data from the Statistical Institute of Jamaica shows that at the end of November 2014 inflation was recorded at 6.7 per cent.

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