Venezuelan president Hugo Chávez called for increased cooperation among Cuba and other Caribbean nations buying his country's oil under highly preferential terms as he met with neighbours looking for more cheap fuel.

Cuba already benefits from Venezuela's largesse more than any other member of the PetroCaribe pact that has boosted the South American nation's influence in the region.

But higher-than-expected energy use this year has prompted Cuban officials to threaten Saturday morning blackouts and forced vacations just as the sweltering summer season begins.

"What would have become of our poor economy if this mechanism hadn't been there when a barrel of an oil cost more than US$140?" Cuban Vice-President Esteban Lazo asked the gathering.

"All of us in the Caribbean have triumphed."

Heard promising

Leaders of 18 nations in the PetroCaribe pact heard promising news during the one-day summit on the island of St Kitts.

"PetroCaribe will be strengt-hened - independent of the inter-national situation, independent of the price of oil," Venezuelan President Hugo Chávez said as he arrived.

During the meeting, Chávez called the pact a geopolitical and social "offensive for unity" and said Venezuela is open to accepting other nations.

In Cuba, the programme is building new refineries and expanding existing ones that will raise the island's refining ability to 350,000 barrels daily, he said.

"When you turn 85, Fidel, you'll know what your present is," Chávez said, referring to former Cuban president Fidel Castro, whose 83rd birthday is next month.

Chávez made no concrete promises about increased oil sales but wrapped up the summit by calling on member nations to collaborate on everything from bauxite production to agriculture.

"We've been detaching ourselves from dependency on the north," Chávez said, referring to the US.

The plan promotes Chávez's vision of regional independence from the United States and the lure of cheap oil has drawn countries friendly to Washington, as well as the Venezuelan's leftist allies. Despite political tensions, Venezuela remains the third-largest supplier of crude oil to the United States.

Fluctuating prices

St Kitts and Nevis Prime Minister Denzil Douglas said that with world oil prices fluctuating, his country "has benefited greatly from the security of supply under the terms and conditions of PetroCaribe."

Cuban officials reported that energy consumption overshot projections by three per cent in the first quarter and they are struggling to rein in use.

Air conditioners have been stilled at government offices and some work hours shortened. Tellers at an Old Havana bank cooled themselves with hand-held fans this week. Clerks at shops along Havana's waterfront swapped their uniforms for cooler clothes and still sweated as temperatures inside and out hit the mid-80s Fahrenheit (about 30°C).

"The measures have been successful," Cuban Basic Industries Vice-Minister Juan Manuel Presas said this week. He estimated national energy consumption fell 10 per cent in early June, averting the need for Saturday morning blackouts.

Cuba produces about half of its fuel and depends on Venezuela for the rest. That aid has easedonce-dramatic power and transport shortages on the island of more than 11 million people - an improvement symbolised by a fleet of new buses from China and Belarus.

Falling petroleum prices have hurt oil-rich Venezuela over the last year. Though rebounding prices reached an eight-month high Thursday - touching US$73.23 a barrel on the New York Mercantile Exchange - they remain 50 per cent below last July's peak.

Venezuela established the PetroCaribe pact in 2005 to give Caribbean allies fuel on easy terms - long-term loans and the option to pay with services or goods such as rice, bananas and sugar.

Venezuelan officials at the summit said their country had financed about US$3 billion of the 94 million barrels of fuel sold to neighbours since the pact was formed in 2005.

With oil prices above US$50 a barrel, member nations must pay 60 per cent of their oil bills to Venezuela within 90 days and the rest over the next 25 years at 1.0 per cent interest.

If oil prices rise to US$80 a barrel, only half must be paid up front.

Cuba's terms

Cuba gets oil under an agreement made before PetroCaribe was formed. Few of the terms have been revealed but Cuba apparently pays most of what it owes by sending Cuban doctors, sports trainers and other specialists to Venezuela.

Venezuelan economist Asdrubal Oliveros said if oil prices don't rise more, "it would be hard for me to believe that Venezuela would substantially increase those shipments to the detriment of its clients that pay."

Still, Oliveros said Chávez's political ties with communist-ruled Cuba are so important that Venezuela might increase oil shipments to the island while reducing shipments to other nations.

Venezuela's state oil company, Petroleos de Venezuela SA, increased oil shipments to Cuba by nearly a third in 2008 over the previous year, to 115,000 barrels of oil and oil products daily.

Venezuela has increased oil shipments to 120,000 barrels a day to other Petrocaribe members, Venezuelan Oil Minister Rafael Ramirez said Thursday in St Kitts. "We're guaranteeing supply," he said.

AP