October 29, 2021
A Haitian engineer and political activist has been watching the current fuel crisis that is putting Haiti further and further into despair and the brink of total collapse again and wants the country to renegotiate the Petro-Caribe deal with Venezuela and also to return the control of fuel purchases to the Ministry of Finance.
This isn’t the first time Haiti faced a fuel crisis. In late, 2019, Haitians have called for then President Jovenel Moïse’s resignation, blaming him for failing to address the problems of widespread food and fuel shortages as well as the country’s double-digit inflation.
The island had experiencing severe fuel shortages, with gas on the black market selling for $13 to $15 a gallon. To make matters worse, hospitals, orphanages, and other emergency services are functioning with limited capacity because of the fuel shortages and lack of safe drinking water.
The same is happening now in 2021 with hospitals. “Without fuel, we can’t run our hospital,” says Dr Kanouté Dialla, manager of the Tabarre hospital. “We are doing our best to maintain our activities by adapting them from day to day, but this situation is unsustainable. The hospital is the only centre in the country specialising in the treatment of severe burns.”
Due to the failing electricity network, MSF facilities use generators to run the various medical services, including the centre dedicated to treating severe burns. The current fuel shortage jeopardises our ability to operate.
Gangs have taken over Haiti’s fuel routes into Port Au-Prince, blocking Haiti’s ports, choking off fuel shipments. Hospitals on the verge of shutting down as generators run dry, risking the lives of hundreds of children. Cellphone towers going without power, leaving swaths of the country isolated. And an acute hunger crisis growing more severe each day.
Jude Elie, president of political action group Sove Lone and an engineer, told Caribbean Magazine Plus:” The Fuel problems that Haiti has been facing for the past year has worsened these past weeks.
“Solving this problem requires a determined government working with concerned partners-buyers.”
He added: “It is a 4 steps solution: 1- return the ordering of all fuels to the Finance Ministry. Funds gathered from the major distributors; 2- license out the construction of a major Tank Terminal in the Northwest Province capable of holding 6 months’ worth of Fuel; 3- license out the construction of smaller Tank Terminals in the biggest port of each province; 4- license out fuel shipping barges from the Main Terminal to the 10 smaller ones.”
Mr Elie certainly does not want to keep any version of the controversial PetroCaribe deal with Venezuela either. “We must renegotiate the payments to Venezuela,” he said.
The PetroCAribe agreement was initiated with the aim of having solidarity with other countries in accordance with the Bolivarian Alliance for the Peoples of Our America (ALBA). The payment system allows for the purchase of oil at market value for 5 percent to 50 percent up front with a grace period of one to two years; the remainder can be paid through a 17-25 year financing agreement with 1 percent interest if oil prices are above US$40 per barrel.
Venezuela’s Energy and Petroleum Minister and President of Petróleos de Venezuela (PDVSA) at the time, Rafael Ramírez, said of the deal that it seeks to cut out the middleman in such transactions: “We’re not talking about discounts…We’re talking about financial facilities, direct deliveries of products, [and] infrastructure.
Would renegotiating the PetroCaribe do the trick when armed gangs have the access points for fuel choked off at the moment in Haiti.
CNN reported, The national fuel shortage shuttering Haiti’s hospitals has lasted for months, driven by reasons ranging from pandemic aftermath to government incompetence to gang violence. But it is also bringing into focus how the Haitian government’s oil policy sets it up to face crisis after crisis.
National law requires Haiti to purchase fuel directly from international vendors through its Office of Monetization of Development Assistance Programs (BMPAD), which buys oil at international market rates.
But the law also requires that gas be sold here for no more than 201 Haitian Gourdes per gallon, or about $2. That’s one of the cheapest prices in the world and far below what it would sell for in an open market — amounting to a major subsidy that the country’s heavily indebted government cannot afford.
In its fiscal year 2020, which ended on September 30, Haiti’s government lost the equivalent of roughly $300 million in fuel transactions, according to the Ministry of Economy and Finance. At the same time, overall government revenue was 35% less than what was expected, according to the central bank.
Without other strong sources of national revenue to offset its fuel-related losses, the government often does not have enough cash on hand to purchase enough fuel for a country of more than 11 million people.
And even when the government does have cash, it’s not always the right kind. “Sometimes the government has the money but doesn’t have US dollars,” said Haitian economist Etzer Emile. “No one wants to buy Haitian currency on the international market because it is so unstable.”
Capacity is also an issue, according to Emile. Haiti does not have enough storage capacity for fuel that would enable it to buy large quantities when it has the money to do so, preventing the country from taking better advantage of the times when it has more dollars to spend.
There are two main locations where fuel is imported in Haiti, at the ports in the Carrefour and Varreux neighborhoods of Port-au-Prince.
Access to both of these facilities depends entirely on National Highways 1 and 2. Any and all fuel that gets delivered to the rest of the country will at some point traverse those roads — which run through the heart of territory controlled by some of Haiti’s most powerful gangs.
Some have begun taking advantage of that, setting up roadblocks to keep tanker trucks from accessing the fuel delivered to docks. Anyone, including the government, who tries to pass gang roadblocks faces steep consequences.
“You might get shot, your tanker might explode, they could kill you,” said one fuel retailer who asked not to be identified for security reasons. “If you’re lucky the gang will just kidnap you because then you might survive.”
At times, gangs have allowed some tankers to get through, but only after paying exorbitant bribes. An empty tanker is expected to pay at least $5,000 to pass gang checkpoints while one carrying fuel can be charged up to $20,000, according to the retailer.
The gang’s motivations for blocking highways is not solely monetary. Jimmy Cherizier, leader of a federation of gangs known as G9 that has been blocking fuel delivery tweeted on Monday morning, “We demand the resignation of Ariel Henry as soon as possible…The solution for the crisis is the resignation of Ariel Henry…”
The Prime Minister’s office says it does not “deal with” gangs.