BRIDGETOWN – Haiti and Nicaragua are the PetroCaribe member-states that will suffer the most if falling global oil prices force Venezuela to curtail or end the initiative, a senior International Monetary Fund official said on Wednesday.
Adrienne Cheasty, deputy director of the IMF’s Western Hemisphere Department, told a press conference in Barbados that the impact of major changes to PetroCaribe would vary by country.
Under PetroCaribe, an initiative of late Venezuelan President Hugo Chavez, the oil-rich Andean nation supplies crude to 17 Caribbean and Central American countries on generous payment terms.
Governments that have made preparations, such as Guyana, the Dominican Republic and Jamaica, are likely to be less affected if PetroCaribe breaks down, Cheasty said.
She said that Nicaragua and Haiti, which lack global market access and deep domestic financial markets, may fare the worst.
Besides offering member-states cheaper oil, PetroCaribe also supports social programs in some of those countries.
“A couple of countries with energy subsidies, notably Haiti, plan to offset the additional cost by recovering foregone revenue on the taxation of fuel products,” Cheasty said.
“The drop in oil prices is more complex for members of PetroCaribe than for other oil importers. Like others, their countries will gain. But their governments may nonetheless lose. Mainly sweet, but a little sour,” she added.
The IMF official said Venezuela’s loss of income from the oil price drop has caused analysts to question whether Caracas can keep PetroCaribe going.
Oil prices have dropped from more than $100 barrel last June to less than $50 now.