Hardship in Venezuela is the effect of poor longterm planning. The present shortage of US Dollars in Venezuela is mostly due to: 1. Extremely cheap oil on domestic markets ( 4-6 cents a gallon for a local consumption of 750,000 barrels per day). 2. Exports to USA are is its lowest since 1986 ( less than 700,000 barrels per day), and are reducing daily. USA has become a net oil exporting country. 3. Petrocaribe agreement with oil for US $ 40, plus payment schedule. This only constitutes 30% of Venezuelas total production. Petrocaribe is an oil alliance of many Caribbean states with Venezuela to purchase oil on conditions of preferential payment. The alliance was launched on 29 June 2005 in Puerto La Cruz, Venezuela. In 2013 Petrocaribe agreed links with the Bolivarian Alliance for the Americas (ALBA), to go beyond oil and promote economic cooperation. The agreement was initiated with the aim of having solidarity with other countries in accordance with ALBA. The payment system allows for purchase of oil on market value for 5%-50% up front with a grace period of one to two years; the remainder can be paid through a 17-25 year financing agreement with 1% interest if oil prices are above US$40 per barrel. The agreement builds on payment terms from the San Jose Agreement and the Caracas Energy Accord.[ Energy and Petroleum Minister and President of PDVSA Rafael Ramírez said of the deal that it seeks to cut out the middleman in such transactions: Were not talking about discounts...Were talking about financial facilities, direct deliveries of products, [and] infrastructure.” There are a total of 17 members, plus Venezuela; 12 of the members are from the 15 member CARICOM (excluding, Barbados, Montserrat and Trinidad and Tobago). At the first summit, 14 countries joined the alliance. These were: Antigua and Barbuda, the Bahamas, Belize, Cuba, Dominica, Dominican Republic, Grenada, Guyana, Jamaica, St Lucia, St Kitts and Nevis, Saint Vincent and the Grenadines, Suriname and Venezuela. At the third summit, Haití and Nicaragua joined the union. Guatemala joined in July 2008 but left the organization in November 2013 stating that Venezuela had not provided them with the ultra-low financing rates that they had been promised. Haiti had not been initially invited to the talks, since Venezuela did not recognize its then post-Jean-Bertrand Aristide government. The country finally joined the alliance in April 2006, once the newly elected president René Préval took office. Honduras became the 17th member of the alliance in December 2007, under President Manuel Zelaya. Belize set up the Belize Petroleum Energy Company to coordinate for the project.
Posted on: Sun, 23 Feb 2014 14:56:32 +0000
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