Trinidad and Tobago has announced it will help facilitate the PetroCaribe agreement by supporting the removal of the Common External Tariff (CET) on petroleum products.
The move will allow Caricom (the Caribbean Community) islands to legally take advantage of the deal because the CET is a tax on products from outside of Caricom.
Trinidad and Tobago’s state-owned Petrotrin refinery exports 50,000 b/d of products to its Caricom neighbors.
Under the PetroCaribe agreement brokered by Venezuela President Hugo Chavez, Caricom countries are allowed to access Venezuelan crude with the islands paying only part of the cost for crude and products and the remainder being converted into soft loans.
The PetroCaribe deal includes a fund initially capitalized at $50 million.
Member states must pay market prices for Venezuelan oil but could pay a portion up front and finance the rest over 25 years at low interest rates.
Trinidad and Tobago Prime Minister Patrick Manning said while his country still believed there were both “dangers and significant benefits” to the Caricom states that signed the PetroCaribe deal, his country will have the CET removed.
“We are voluntarily giving that up,” Manning said of the CET protection.
“We believe that the Pointe-a-Pierre refinery, existing as long as it has, must be internationally competitive or therefore we should do something else.”
Jamaica’s state-owned PetroJam refinery is about to be expanded on the basis of the increased crude oil it will receive from Venezuela as part of the PetroCaribe deal.
Manning repeated why Trinidad and Tobago and Barbados have not signed the deal:
“In Trinidad and Tobago, we have a refinery...and in the case of Barbados, because they have a processing arrangement with the Trinidad and Tobago refinery.”
