GRENADA (Commonwealth Union)_The Grenada administration said on Tuesday that it had had first talks with Venezuela about paying back more than EC$370 million (one EC dollar is equal to US$0.37 cents) due to the South American nation, adding that the PetroCaribe pact will soon be resumed.
Given the generally high cost of petroleum on the global market, this could not have come at a better moment, Foreign Affairs Minister Joseph Andall stated at the regular post-cabinet news conference.
The PetroCaribe oil alliance was founded at Puerto La Cruz, Venezuela, on June 29, 2005, and it consists of 18 Caribbean nations. Beneficiary countries may purchase oil at market price under the deal, but they had to pay only a portion of the price up advance. With a 1% interest rate, the remaining sum can be paid off over 25 years.
Grenada’s payment mechanism allowed for the purchase of oil at market value for five to fifty percent up front with a grace period of one to two years. The remaining amount was paid through a 17 to 25-year finance agreement with one percent if oil prices were higher than US$40 per barrel. That contract expired in 2019.
Due to the sharp decline in Venezuela’s crude output, political pressure from the US on Caracas and the recipient countries, and the time’s falling global oil and gas prices, which made it more advantageous to buy oil elsewhere, supplies under PetroCaribe were halted for the majority of Caribbean nations.
During his recent trip to the United States to attend the UN General Assembly, Andall informed reporters of this. He had a conversation with Venezuela on the PetroCaribe debt while also sharing information about his recent journey to the USA to attend the 77th session of the United Nations General Assembly (UNGA). The PetroCaribe accord owes us money as well, and there have been preliminary negotiations about how to amortize that obligation, the official said.
According to Grenada’s Public Debt Bulletin, the latest edition of which is issued by the Ministry of Finance, the PetroCaribe debit represents 11.5% of the island’s GDP (GDP). Aside from three State Owned Enterprises (SOE), the entire debt stock (unaudited) of SOEs was roughly EC$466.0 million at the end of the first quarter of 2022. The magazine said: “This is inclusive of the debt commitments of PetroCaribe, which were EC$372.1 million.”
