PREVAL WILL SIGN PETROCARIBE DEAL ON MAY 15

C O N F I D E N T I A L PORT AU PRINCE 000758 SIPDIS SIPDIS STATE FOR WHA/CAR WHA/EPSC FOR FAITH CORNEILLE IB/IFD STATE PASS TO USAID FOR LAC/CAR INR/IAA (BEN-YEHUDA) TREASURY FOR JEFFREY LEVINE COMMERCE FOR SCOTT SMITH E.O. 12958: DECL: 04/26/2011 TAGS: EAID ECON EFIN ENRG HA VE SUBJECT: PREVAL WILL SIGN PETROCARIBE DEAL ON MAY 15 REF: CARACAS 1104 Classified By: Ambassador Janet A. Sanderson for reason 1.4(b) ¶1. (U) President-elect Rene Preval on April 25 announced that that Haiti will join the PetroCaribe Program on May 15, the day after his inauguration. Preval explained that Haiti will pay for 60 percent of the oil from Venezuela up front and that 40 percent will be payable over a period of 25 years, at one percent interest. Preval explained that joining PetroCaribe does not mean gas prices will be lowered at the pump. The government will continue to sell petroleum products to the private sector at market prices and redirect the 40 percent that would have been spent on fuel to "special presidential" development projects. (Note: gas prices went up by 12 percent at the pumps last month, following a rise in world market prices. End note.) ¶4. (C) Comment: As Preval,s inauguration date approaches, he is feeling increasing pressure to produce immediate and tangible changes in Haiti,s desperate situation. Preval has privately expressed some disdain toward Chavez with Emboffs, and delayed accepting Chavez' offer to visit Venezuela until after he had visited Washington and several other key Haitian partners. Nevertheless, the chance to score political points and generate revenue he can control himself proved too good an opportunity to miss. We are wary of the creation of a special presidential fund. There have been waves of corruption in Haiti. We will encourage Preval to channel the money through existing programs. SANDERSON =======================CABLE ENDS============================