By William Ysaguirre
The opening of a head office for Alba Petrocaribe Belize Energy Limited, APBEL, last Friday is expected to bolster the diplomatic ties that Belize and Venezuela enjoy. Petrocaribe is an oil alliance of Caribbean states with Venezuela to purchase oil on conditions of concessionary payment.
Since the signing of the existing agreement in September of 2012, the United Democratic Party Government has embarked on an infrastructure development that has resulted in the construction of sports stadiums in every municipality, the introduction of social programs and a $20 million investment to establish the National Bank of Belize Ltd.
Under the Petrocaribe agreement APBEL buys the fuel from the state owned oil company, Petroleos de Venezuela Sociedad Anonima, (PDVSA) and then sells to Trafigura, which through its subsidiary, PUMA Energy Belize Ltd, markets all petroleum products in Belize.
Belize imports about US$100 million worth of petroleum products; gasoline, diesel and lubricants per year, and because Petrocaribe allows Belize to delay payment on 60 percent of the cost through a financing arrangement of one per cent per annum for 25 years, Belize now buys all its fuel from Venezuela.
Belize must pay 40 percent of the fuel cost up front or within 30-90 days of delivery. The remaining 60 percent is financed, giving the Government of Belize access to about US$60 million in financing per year. Since the first shipment of Petrocaribe fuel was received under the new agreement in September 8, 2012, Belize has imported 1,428,704 barrels of petroleum products over the past 19 months, with a landed Cost Insurance & Freight (C.I.F.) value of US$179.9 million; of which US$103.6 million then became available in financing to the Belize government.