KINGSTOWN, St Vincent (CMC) — St Vincent and the Grenadines owes EC$141 million (EC$1 = US$0.37 cents) to Venezuela under PetroCaribe, an oil alliance of some Caribbean and Latin American nations with Venezuela to purchase oil on conditions of preferential payment.

“In the aggregate, it is EC$141 million, comprising EC$62 million plus, as indicated in the debt profile to IADC (International Airport Development Company), just over EC$60 million in the central government, and other monies as I have just indicated when I read out the entire printout, including over eight million dollars in cash balances,” Prime Minister and Minister of Finance Ralph Gonsalves told Parliament.

St Vincent and the Grenadines received its first shipment of petroleum products under PetroCaribe in December 2005, on the eve of the general elections, and has since received diesel and some liquefied petroleum products under the agreement on a regular basis.

Gonsalves, making a ministerial statement, told lawmakers that when the price of oil is between US$15 and US$20 a barrel, countries that have signed on to PetroCaribe must pay within 90 days for 95 per cent of the oil that they receive from Venezuela. He said the remaining five per cent can be repaid over 25 years at two per cent interest.

Conversely, when the price of oil rises to more than US$100 a barrel, 50 per cent is paid within 90 days and 50 per cent over 25 years.

Gonsalves said that during the first three years of the agreement, the State-owned electricity company VINLEC was not invoiced for the fuel it received under PetroCaribe.

The monies were placed in an account and when everything was resolved, all the money for the short-term portion went to PDVSA SVG — one of two State companies established here to facilitate the PetroCaribe agreement and the other EC$14 million went to the Government.

The Government has received all invoices from 2009 to August 2014, Gonsalves said, adding that in the earlier years, the island imported less than 100,000 barrels of oil a year.

In 2013, however, the country imported 171,000 barrels at a cost of EC$50.6 million, Gonsalves said.

Of that amount, EC$33.8 million went to the Government as a loan.

Up to August 2014, St Vincent and the Grenadines had imported 141,000 barrels this year, at a cost of EC$48.5 million, with EC$26.3 million going to the Government as a loan.

Initially, only VINLEC purchased oil under the PetroCaribe agreement, but petroleum dealer, Sol, has come on board.

Gonsalves said PetroCaribe SVG has told him that VINLEC buys 10,000 plus barrels a month, and Sol 6,000 barrels.

He said that contrary to what has happened in some other countries participating in the PetroCaribe initiative, the island has paid fully all the short-term debt.

Between 2010 and August 2014, EC$95.1 million has been paid on the short-term portion, while EC$5.97 million, including principal and interest, has been paid on the long-term debt, EC$760,000 of which was for interest, Gonsalves told lawmakers.

“I must say that there has been a continued discussion about the financed portion with VINLEC which has come over, and we are sorting that out with PDVSA. There are some bureaucratic rules, but it is money which has come to us, come to the Government.”

He told lawmakers that St Vincent and the Grenadines is “absolutely not” in default, and listed 31 projects and programmes here that have been financed using the PetroCaribe loan.

Gonsalves’ ministerial statement came ahead of a question by Opposition Leader Arnhim Eustace about the island’s debt under PetroCaribe as at June 30; where it is recorded in terms as on the national debt, given it’s not recorded in the estimates for 2014; and the amount repaid in interest and principal under the loan facility and where it is recorded in the national debt records.

Gonsalves told lawmakers that all but one of the Organisation of Organisation of Eastern Caribbean States (OECS) countries said they do not put the PetroCaribe debt in the debt profile.

He said one of the OECS capitals has told him that it is yet to determine how the PetroCaribe debt will be handled.

Without PetroCaribe monies, the island would not have been able to house persons displaced by the extreme weather last Christmas, would not have been able to give farmers EC$6 million in loans at two per cent interest, and would not have been able to finance the Support for Education and Training programme, a paid internship for community college and university graduates.

Gonsalves said his Government will continue to be responsible with the resources from PetroCaribe, will honour the agreement signed in 2005, and will function with the local companies under the initiative in the manner in which they were set up.