PPP only accounts for US$15M out of US$400M PetroCaribe funds - GEA annual report shows

PPP only accounts for US$15M out of US$400M PetroCaribe funds – GEA annual report shows

Jul 17, 2016 News

Former President Bharrat Jagdeo

Guyanese companies and entities began importing fuel from Venezuela, with Guyana Energy Agency (GEA) as an agent of purchase, under the lucrative PetroCaribe agreement back in 2007.

It was agreed that only a portion would be paid at the time, with the remainder being kept for long term financing by Guyana in the PetroCaribe fund.

When the coalition Government took office last year, it had announced that the PetroCaribe fund was completely empty. This initiative was administered under the People’s Progressive Party (PPP) administration.

Former President Bharrat Jagdeo had defended what his party did with the fund while in power.

Jagdeo had been quoted in sections of the media prior to the announcement of the fund being empty, as saying “Let’s say oil prices are high; Venezuela said we will give you some credit.

“If oil prices are high then 40 per cent of the oil payments can be kept by the country as a loan, 60 per cent you have to pay over a time span.”

He had gone on to explain that while other Governments in the Caribbean used the funds for development projects, the PPP government placed the money in the PetroCaribe fund at Central Bank, to finance the purchase of rice. This rice was shipped to Venezuela to mitigate Guyana’s debt.

Besides rice purchases, Jagdeo had admitted that the PPP Government had used US$15M from the fund to construct the Hope Canal, East Demerara Water Conservancy. This was because the government “saw it as important for the agriculture sector.”

However, GEA’s annual reports dating back to 2007 tell a story of billions of dollars in inflows to the fund. It shows that over the duration of the agreement (2007-2015); 12,175,027 barrels of oil were imported through the GEA from Venezuela, making Venezuela the single largest source of fuel imports for Guyana.

According to GEA, during that period at least $84.1B was disbursed to the Ministry of Finance as part of the financed portion, after GEA would have facilitated Venezuela being paid its portion.

The reports detail that in 2008, a total of 1,419,868 barrels of oil were imported from Venezuela and there was $16.5B (US$80M) in disbursements to the Ministry of Finance, as the financed portion.

In 2009, a further 1,079,252 barrels of oil were imported from Venezuela, representing 28% of total oil imports for the year. While the 2009 report does not make mention of disbursements, in 2010 the sum of $9.1B (US$44.8M) was disbursed to the Ministry under the agreement.

Former Finance Minister Dr. Ashni Singh

In 2011, a total of 1,451,843 barrels of oil were imported from Venezuela, 33.5 percent of imports. The agency reported that $21.7B (US$105.2M) was disbursed to the Ministry of Finance as the financed portion under the agreement.

In 2012, a mammoth 2,378,982 barrels of oil were imported from the Spanish-speaking country. Venezuela accounted for 76 percent of total imports that year.

The report states that $36.8B (US$178.8M) was disbursed to the Ministry.

For 2013, another 1,597,341 barrels were brought in. In 2014 that number was 1,749,883 barrels and in 2015, the year the agreement came to a premature end even before it expired, the number was 834,056 barrels.

The reports do not say what was disbursed to the Ministry for these years.

Last year, Minister of Finance, Winston Jordan, had made it clear that it was his predecessor in office, Dr. Ashni Singh, who had been the custodian of the account held at the Bank of Guyana.

Guyana Rice Producers Association (GRPA) General Secretary Dharamkumar Seeraj had also pointed his finger squarely at the previous Minister of Finance and his Ministry.

Rice exports

With there being no monies in the PetroCaribe Fund to pay rice farmers, the coalition had reportedly been forced to dip into the Consolidated Fund for US$9M to clear off some of the debt owed to them in 2015.

Despite the PPP claims of having used money from the fund to pay rice farmers, rice farmers have nevertheless been forced to protest over payments.

For instance, in 2014 protests by Essequibo rice farmers over late payments erupted into violence and blocked roads.

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