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Saturday, January 22, 2011

Dominican drivers: Oil deal with Venezuela costly

Hundreds of taxi and bus drivers surrounded the Venezuelan Embassy on Wednesday demanding to see the fine print of an oil agreement between the two countries that they say has led to higher fuel prices.

The Dominican Republic receives 50,000 barrels of oil daily under President Hugo Chavez's Petrocaribe program, which provides oil and natural gas at preferential prices.

But government statistics show the price of gasoline and diesel has increased more than 50 percent in the past two years. Gasoline costs about $4.60 a gallon, while diesel costs about $4.16.

"Where are the benefits, president?" read one protester's sign bearing Chavez's image.

Dominican officials did not immediately return calls for comment. Ramon Fadul, minister of commerce and industry, said earlier this week that the government adjusts the cost of gasoline and diesel weekly based on inflation and the international price of fuel.

Ramon Perez Figuereo, leader of the country's largest drivers' union, demanded that the Venezuelan government pressure Dominican officials to disclose how much debt the island nation owes to the South American country, as well as the money the Dominican Republic earns through the 2005 Petrocaribe deal.

"The Venezuelan government's attitude of solidarity has become a debt that the poor people of the Dominican Republic will pay," said legislator Juan Hubieres, who is also president of a drivers' union.

In addition to the preferential-price agreement, the Dominican Republic imports 70,000 barrels of oil a day from Venezuela under other accords. The Caribbean country consumes about 150,000 barrels a day.

In May 2010, the Dominican government signed a long-awaited $131 million deal that gave Venezuela's oil company a 49 percent stake in Refineria Dominicana de Petroleo SA.

Source: Bloomberg

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