Energy
HOW PETRO CARIBE BENEFITS GRENADA
PDVSA the state owned oil company of Venezuela sells diesel fuel to Petro Caribe (PC) Grenada Ltd (which is solely owned by the Government of Grenada) at current world prices. PC Grenada has 60 days in which to pay the initial 50% of shipment price Meanwhile PC Grenada sells the entire shipment of fuel to Grenlec (Grenada Electricity company) and receive all monies for said fuel from Grenlec within a 60 day time frame After 2 years PC Grenada starts paying back the 50% balance to PDVSA at an annual interest rate of 1% per year. For effectively 25 years Money in hand allows PC Grenada to make investments in Grenada Government bonds, regional bonds and other financial instruments that pay a much higher rate of interest than 1% PC Grenada / Government of Grenada, are able to profit from the differential in interest rates, aswell as benefit from a long term repayment schedule on concessionary terms, allowing Government of Grenada to invest in various social programs for the benefit of the nation such as the Free School books program. There are a total of 18 members in the Petro Caribe oil alliance plus Venezuela; 12 of the members are from CARICOM. Member countries include Antigua and Barbuda, The Bahamas, Belize, Cuba, Dominica, Dominican Republic, Grenada, Guatemala, Guyana, Haití, Jamaica, Nicaragua, St Lucia, St Kitts and Nevis, Saint Vincent and the Grenadines, Suriname and Venezuela.
Grenlec is the sole buyer and customer of fuel from Petro Caribe Grenada Ltd, with an estimated spend of 100 million dollars a year. Three Caricom member States – Montserrat, Barbados and Trinidad never signed on with PC. In Trinidad’s case, which is an oil producing country for itself, and already offers its citizens a heavy fuel subsidy, one can understand. Barbados denied that it had succumbed to pressure from the United States, who have a strained relationship with Venezuela, as the reason for not joining, but have not ruled out agreeing to Petro Caribe in the future. And while it appears that Monteserrat would like to join the alliance, it is unclear if their strong colonial ties are inhibiting them. The agreement was initiated with the aim of having solidarity with other countries in accordance with ALBA. (See ALBA SideBar) Joseph is quick to point out however, that Venezuelan people have their own problems and social ills, and that the anti revolutionary www.businessgrenada.com
camp might consider that this oil rich nation does not have to extend a helping hand to its Caribbean neighbours. “I see this as a very positive thing for Grenada.” continues Joseph, “Venezuela do not have to do this for us. They could get all their money at once from selling on the international market.” “Venezuela also has people suffering, but due to the Internationalist outlook of that nation and a leader with strong ideological views Venezuela certainly sees it as a way in which they can positively impact their neighbours using their oil wealth to help in the development of other nations in the region,” joseph says. PC Grenada Ltd. plan to introduce new products in the form of construction of tanks for the storage of LPG which Joseph assures will mean cheaper ‘cooking gas’ prices for all. The current LPG price of around $50 dollars for a 20 Ilb bottle is currently subsidized by the Grenada Government.
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