Thu | Aug 17, 2017

Cabinet resumes system to pay for Venezuelan oil with Jamaican goods

Published:Friday | July 29, 2016 | 7:21 PM
A section of the Petrojam oil refinery in Kingston. Jamaica purchases oil from Venezuela under the PetroCaribe arrangement through the state refinery.

The Cabinet has approved the reactivation of the trade compensation mechanism under bilateral arrangements with Venezuela. 

In a statement this afternoon, the Office of the Prime Minister (OPM) said beginning in the last quarter of this year, goods valued up to US$4 million will be provided to Venezuela in compensation under the PetroCaribe Agreement.

The development coincides with the rapidly declining social and economic conditions in Venezuela with food and critical services rationed in several parts of the South American country. 

The Compensation Mechanism of the PetroCaribe agreement provides for the repayment of loans to Venezuela through goods and services.

The OPM says the arrangement will be coordinated through the PetroCaribe Development Fund which will facilitate the commercial transactions between Jamaican and Venezuelan businesses for the supply of priority Jamaican products now needed in Venezuela.

The OPM also says details will be worked out in further discussions between the parties.

Under PetroCaribe, Jamaica and other CARICOM countries import oil from Venezuela at preferential rates.

Today’s announcement by the OPM to reactivate the trade compensation mechanism under PetroCaribe follows Tuesday's declaration by the Information Minister Ruel Reid that the government will be providing a total of US$4 million in aid to Venezuela.

Senator Ruel Reid told a post cabinet press briefing that the aid will be in the form of medicine, food and fertiliser.

He said Jamaica is to provide the South American country with US$3 million through the Petro-Caribe Development Fund and another US$1 million through the Ministry of Science Energy and Technology.