Laing: Petrocaribe Fervor Dimming

The current Free National Movement Government has, for now, chosen not to endorse the measure.

The high cost of oil, which has dogged Caribbean nationals left to reap the repercussions of external factors that are contributing to the steep increases, is a matter that is occupying the attention of CARICOM officials as they meet here this week.

Those officials are also discussing the wider cost of living issue.

"All of us have to concede that we in the region are really price takers when it comes to the cost of fuel," Mr Laing acknowledged at the conclusion of the Council for Trade and Economic Development [COTED] meeting at the Sheraton Resort on Cable Beach.

"We do not have either in our numbers or in our production the means to impact the price of oil. That involves a global set of forces that are far beyond the control of this region and for us, really, the way forward consists of trying to negotiate in quarters where that is possible the best prices that can be negotiated in respect or purchasing oil which is largely a private sector initiative."

He said there is not much the region can do to drive down oil prices.

With the exception of Trinidad and Tobago, CARICOM countries are essentially net importers of crude oil and refined products, largely from extra-community sources. Specifically, CARICOM Member States source petroleum products from refineries in Venezuela (Pdvsa), Trinidad and Tobago (PETROTRIN), Curacao (Petroleum Company of Venezuela), and more recently Puerto Rico (Shell), and St. Croix (Hovensa).

There is also limited production of crude oil in Suriname, Belize and Barbados, but they do not come close to satisfying local demand.

The Bahamas is one of six countries in the Caribbean region that elected not to sign onto the Petrocaribe document last year.

While in government, former Minister of Trade and Industry Leslie Miller had pushed for The Bahamas to sign the deal which he said would have driven down fuel prices.

The Venezuela-sponsored oil alliance allows Caribbean countries that have signed on to purchase oil on conditions of preferential payment.

Under the plan, nations can purchase oil at market value, but are only required to pay a certain amount up front. The remainder can be paid through a 25-year financing agreement on 1 percent interest.

The deal allows for the Caribbean nations to purchase up to 185,000 barrels of oil per day on these terms. In addition it allows for nations to pay part of the cost with other products provided to Venezuela, such as bananas, rice, and sugar.

"Really what [Petrocaribe] amounted to…was a borrowing to finance oil more cheaply but ultimately there was a repayment that had to be made in any event for that oil and so I am not entirely sure that that was and is the answer," Mr. Laing said.

"If it were, I’m sure that more CARICOM countries would have hoped on that bandwagon in terms of doing so and to date that enthusiasm has not been there."

To address the deleterious economic, productive and security effects of high petroleum prices, many CARICOM States have taken advantage of support available from Trinidad and Tobago’s Petroleum Stabilization Fund implemented in July 2004, and Petrocaribe signed in June 2005.