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Guatemala to Join Petrocaribe Alliance

Posted on: Tuesday, 8 July 2008, 09:01 CDT

The Central American country of Guatemala has decided to become a member of Petrocaribe, a regional oil alliance with Venezuela to purchase oil on conditions of preferential payment.

The Guatemalan president Alvaro Colom has announced that the agreement will be signed within the framework of the fifth extraordinary Petrocaribe summit of alliance government officials to be held in Venezuela on July 13, 2008.

Subsequently, the agreement is expected to be sent to the Guatemalan Congress and will be approved in the following three to four weeks period. The Guatemalan president affirmed that his country's membership into Petrocaribe is beneficial to its people, as it allows for the financing of social programs.

The Petrocaribe agreement establishes a long-term payment mechanism that foresees financing a percentage of the supply bill which depends on international oil prices. Under current conditions, such mechanism includes a payment of 50% of the bill in 90 days, and payment of the remaining 50% in a period of 25 years at a 1% interest rate and with two years of grace.

The agreement proposes using the resources obtained from financing the bill to be devoted to investments that will benefit the quality of life in Latin American and Caribbean countries.

In Guatemala's case, supply will include 20,000 fuel barrels per day, either diesel or bunker. Mr Colom affirmed that the GTQ300 million per month the government will have available after joining Petrocaribe will be invested in social programs.

Source: Datamonitor

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