Monique Hepburn, Staff Reporter
Consumers will pay market prices for gasoline, but the country will benefit from the PetroCaribe agreement. Motorists at the Unipet Gas station on Slipe Road, St. Andrew last year. - RICARDO MAKYN/STAFF PHOTOGRAPHER
WESTERN BUREAU:
VENEZUELAN PRESIDENT Hugo Chavez is predicting that within the next 10 years, PetroCaribe countries, including Jamaica, will save a total of US$17 billion as crude oil prices rise worldwide.
"God speaks through mathematics and if you take this figure of 200,000 barrels we will be providing per day, PetroCaribe countries will pay US$60 per barrel instead of US$80 per barrel over the next 10 years," said President Chavez while speaking at a press conference at the Ritz-Carlton Hotel in Montego Bay on Tuesday.
A total of US$17 billion dollars will be saved.
Mr. Chavez drew references from a recent study conducted by Venezuelan experts, in which they predict that as oil production peaks with increases in demand for oil and oil products, prices will soar within the next 10 years and that developed countries are the ones that will suffer as a result.
"For each increase of $10 in the price of oil annually, the impact of the gross domestic product (GDP) of industrialised countries is less than 0.2 per cent, but in the case of poor and developing countries, minus three per cent. So you can easily see the difference in impact. That is the reason we have conceived PetroCaribe."
Chavez continued that "the era of cheap oil is over. A report drafted by Venezuelan experts predict that in the next two years the price of oil cannot go below US$60 per barrel so the stability price for oil in the short-term will be $65 per barrel."
Mr. Chavez contended that in the short-term, the price of oil could reach US$80-US$90 per barrel. By 2012, it is predicted that the price of oil could soar to US$80-US$100 per barrel.
President Chavez questioned the gathering as to whether the International Monetary Fund, the International Bank for Recon-struction and Development or any other international financial institution has such a facility in place for the next 10 years.
"Our strategy is to offer financing from Venezuela to countries much more vulnerable and in need," Mr. Chavez noted. "You do not have to thank us, it is a call of our conscience."
Under PetroCaribe, Venezuela will ship 21,000 barrels of oil daily to Jamaica with a 40 per cent financing element to be repayable in 25 years at an interest rate of one per cent per annum. Jamaica officially signed the PetroCaribe bilateral agreement with Venezuela on Tuesday and its provisions take effect retroactively to June 29, 2005.
