UNCLAS PORT AU PRINCE 001618

SIPDIS

SIPDIS

STATE FOR WHA/CAR
WHA/EPSC FOR FAITH CORNEILLE, ED MARTINEZ
EB/IFD
STATE PASS TO USAID FOR LAC/CAR
TREASURY FOR JEFFERY LEVINE
COMMERCE FOR SCOTT SMITH

E.O. 12958: N/A
TAGS: ENRG EPET ECON EAID HA
SUBJECT: PARLIAMENT RATIFIED PETROCARIBE AGREEMENT 08/29

REF: A. PAP 856

B. PAP 1377

C. PAP 1598


1. Parliament ratified the PetroCaribe agreement during a
session of the national assembly, which included 19 of 27
senators and 47 of 88 deputies. 53 voted in favor and 13
abstained; no parliamentarians voted against ratification.
The agreement, signed by President Rene Preval and Venezuelan
Vice President Jose Vincente Rangel on Preval's inauguration
day (ref A), was read out loud followed by commentary on the
document. Several parliamentarians spoke in favor of
ratification citing resultant increases in government
revenues. (The GOH plans to resell gasoline provided under
the agreement to local suppliers at market prices and keep
the difference.) Notably, all appeared to understand that
PetroCaribe would not lower the price of petroleum in Haiti,
currently at around US $5 per gallon at the pump. The local
news today reports the passage of the PetroCaribe agreement,
stating only the facts of the vote, with little commentary or
media fanfare.


2. Comment: Despite this obvious step forward for
PetroCaribe agreement, Haiti still has many kinks to work out
before the program is fully implemented. As the Ambassador
has stressed to Haitian officials, transportation and
insurance costs, as well as storage and distribution of the
petroleum are only several of many obstacles. The GOH
finally sold, in mid-August, the first and only petroleum
shipment, which arrived May 13 (ref B), and there is no news
of a second shipment yet. Because Haiti has a relatively low
petroleum demand -- around 11,000 barrels per day -- and
PetroCaribe has offered to supply up to 6000 barrels per day,
the agreement could have a considerable effect on the
petroleum industry in Haiti. Post will continue to send
updates as appropriate.
TIGHE

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