In the face of several issues, the Venezuelan government is indefinitely suspending the Petrocaribe arrangement to eight Caribbean countries, including Belize.
Petróleos de Venezuela, S.A. (PDVSA), the state-owned oil company, said this week that the suspension comes from rapidly decreasing oil output, which is making it difficult to meet the demands under the arrangement.
PDVSA is suspending a combined 38,000 barrels per day of refined products deliveries to Antigua and Barbuda, Dominica, El Salvador, Haiti, Nicaragua, St. Vincent and the Grenadines and St. Kitts and Nevis. However, its suspension in Belize actually results from issues with collecting payment for the fuel.
John Mencias of Alba Petrocaribe Belize Energy Limited, said that the payment issues stem from Venezuela losing the majority of its corresponding banking relationships in the United States, which rendered the country unable to transfer the money to make payment.
In May, Chargé d’Affaires at the Venezuelan Embassy, Mykel Lenin Castillo Peña, said publicly that there was some US$16 million that Venezuela could not collect from Belize due to the CBR issue, and called it terrorism on the part of the United States.
The agreement has been suspended until Belize can find a suitable option to make the payments. Last year, Prime Minister Dean Barrow had temporarily suspended the arrangement, as falling production had made sourcing fuel from Petrocaribe unreliable.
The Petrocaribe arrangement, signed onto by former Prime Minister Said Musa in 2005, has been a controversial topic in Belize for years as various entities have criticized the Government of Belize for how the funds were spent.
In 2015, Financial Secretary Joseph Waight said that Belize had spent around $300 million through Petrocaribe financing. Over the years issues arose over the funds as GOB was found to be using it on everything from infrastructure projects to meeting payroll and even a $36,000 fun day in Corozal for Collet constituents courtesy their Area Representative Patrick Faber.
