The first shipment of oil to Grenada under the PetroCaribe agreement with Venezuela is expected in St. George's towards the end of next month.

The Grenada Electricity Company Limited (GRENLEC), will be the first local customer to receive the fuel under a three-year agreement it has signed with the Venezuelan state oil company Petroleos de Venezuela S.A. (PDVSA).

GRENLEC's contract to receive fuel from its current suppliers, Texac,o runs out on October 18, clearing the way for its new agreement with PDVSA.

Under the new contract, PDVSA will purchase storage facilities comprising three tanks with a total capacity of 750 thousand gallons of fuel, owned by GRENLEC.

First shipment arrival

"The first shipment of supplies from PDVSA is scheduled to arrive sometime after the 18th of October," said Vernon Lawrence, the general manager of country's lone power company.

"The contract with our current supplier would expire on the 18th of October so we expect within two weeks of that date the first shipment will arrive."

Under the PetroCaribe plan for the Caribbean signed in June 2005, countries pay market price for Venezuelan fuel, but can finance much of the cost over 25 years at low interest and can also pay partly with services or goods like rice and bananas.

Anticipating reduction in cost

Lawrence is anticipating a slight reduction in the cost of electricity with the commencement of supplies.

"There is a marginal difference in the price of fuel coming from Venezuela as against our traditional suppliers or other suppliers," Lawrence noted.

"We are seeing somewhere in the order of 10 US cents difference per gallon of fuel so that will be passed on to our customers, but it does not translate into a significant reduction in electricity prices, but there will be some reduction."

Grenada is among several CARICOM countries that have signed the deal with the Hugo Chávez administration to buy oil under preferential terms.

The agreement is renewable annually.

- CMC