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Chavez's ill-health makes Petro-Caribe pact uncertain

Published: Sunday January 6, 2013 | 6:25 pm Comments 0
A section of Jamaica\'s oil refinery, Petrojam
A section of Jamaica's oil refinery, Petrojam

The ill-health of Venezuela's president Hugo Chavez has sparked jitters among government officials here as the continuation of a concessionary oil-deal under the Petro-Caribe Agreement with Jamaica becomes uncertain in the event of his demise.

Chavez is said to be suffering from a severe lung infection following a fourth surgery in Cuba for cancer. He is to be sworn in for a third time as president on Thursday following his election last October, but it is unlikely that he will make the ceremony.

Energy Minister, Phillip Paulwell says the PetroCaribe arrangement, which was formed with Venzuela in 2005 under the PJ Patterson administration, has been very beneficial to the country.

Paulwell was speaking with The Gleaner/ Power 106 News Centre following a church service organised by the Venezuelan embassy this morning at the Grace Missionary Church in St Andrew. The service, which centred on prayers for the recovery of the ailing Venezuelan president, was also attended by Prime Minister Portia Simpson Miller.

At a Gleaner Editors’ Forum last year, the then financial secretary, Dr Wesley Hughes, estimated that the discontinuation of the PetroCaribe arrangement could result in a US$600 million per year impact on the country’s balance of payments.

Hughes was speaking against the background of President Chavez’s re-election in October.

Roughly two-thirds of the crude oil imported by Jamaica comes from Venezuela.

Under the agreement, Venezuela allows Jamaica and other select Caribbean countries to purchase oil, requiring only a certain percentage of the cost upfront. The remaining percentage is paid over time under a special financing arrangement. A fund was also formulated under the agreement, which allows the island to treat, as loan proceeds, the funds under the PetroCaribe facility.

The loan attracts interest of one per cent.

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