Prime Minister Ralph Gonsalves says he has received no indication that PDVSA, the state-owned oil company in Venezuela, has suspended fuel shipments to St. Vincent and the Grenadines (SVG) under the PetroCaribe agreement.
He, however, said that SVG is being affected by the sanctions that the United States has imposed on the Nicolas Maduro administration in Caracas.
“We have received no such communication and they would communicate to us if it were true,” Gonsalves told a press conference in Kingstown on Thursday of allegations that the PetroCaribe oil shipments have ceased.
He further said that he contacted the Venezuelan chargé d’affaires in Kingstown, who said he had received no such information.
“This is an era of fake news and all sorts of things,” Gonsalves said.
A report circulated via social media claimed that PDVSA was suspending oil shipments under PetroCaribe to eight countries, namely Antigua and Barbuda, Belize, Dominica, El Salvador, Haiti, Nicaragua, SVG, and St Kitts.
The Gaston Browne government in Antigua and Barbuda have dismissed the report as “fake news”.
At Thursday’s press conference, Gonsalves admitted that the U.S. sanctions began affecting SVG as early as last year.
“The impact is for Venezuela, but it has affected us,” he said, adding that so far this year, SVG has received two shipments of fuel under the PetroCaribe agreement.
He, however, said that the portion of the cost of the fuel that SVG is allowed to keep as a long-term, low-interest loan, was just EC$2.4 million.
“Last year, the sanctions started to bite. We had long-term financing of just $7 million,” he said, adding that this compared to more than $35 million in 2014.
“That’s to give you the way in which the sanctions have affected us,” Gonsalves said.
He said that the sanctions affect SVG because of the way in which the privately-owned vessels that transport the fuel from Caracas to Kingstown are paid.
“As I understand it, PDVSA has to pay the vessels … through banks. If the money goes through an American corresponding bank or Canadian corresponding bank, they will seize them, because of the sanctions. So they have to find ways to pay them and I know they have been having difficulties finding ways to pay the people to move the fuel.”
Gonsalves said that SVG is not expected to experience a fuel crisis because of the development.
He said there are nearly 12,000 barrels of diesel in storage, in addition to 4,000 barrels of gasoline, and a much smaller amount of liquefied petroleum gas.
Fuel security, notwithstanding, SVG is being affected in two ways by the development, the most immediate being government revenue.
The government had budgeted some EC$10 million of PetroCaribe funds to finance a number of projects and programmes.
Among these is the Support for Education and Training (SET) progamme.
When the programme was launched in March 2016, it provided for one-year internships for 106 Community College and university graduates.
Under the programme, an EC$1.5 million initiative, funded by PetroCaribe, interns who have A’ Level and associate degree qualifications receive a stipend of EC$1,100 per month, while those with university degrees receive EC$2,200.
Gonsalves told Wednesday’s press conference that the impact of the sanctions would also affect his government’s housing programmes.
“It’s clear that we are not going to get $10 million in long-term financing because of these problems, so we have to find other sources to finance those things for which they were earmarked.”
Another impact is that VINLEC, SVG’s state-owned and sole commercial supplier of electricity, has to, again, purchase fuel from Sol or Rubis, the nation’s other suppliers of petroleum products.
“At the moment, VINLEC’s tanks are filled and the tanks at the Hugo Chavez storage plant at Lowmans, as I said, you have nearly 12,000 barrels.”
The prime minister said he had made it plain that his government was not going to not have Sol and Rubis operate because of the PetroCaribe initiative.
“Because you have to make sure that you have energy security so that… if PetroCaribe at anytime cannot supply to VINLEC, VINLEC will purchase from one of the other entities, whether it is Sol or Rubis. So, you don’t have to worry about St. Vincent and the Grenadines having a problem.
“I think that is very important,” the prime minister said.
He said that the geothermal project, which is expected to come onstream in 2021, three years later than scheduled, will provide greater energy security.