Poverty & Social Development: A Caribbean Perspective

SAN JUAN -- One year after 13 Caribbean countries signed a deal with Venezuelan President Hugo Chavez to buy oil under preferential terms, most of them haven't received a single drop of fuel, while those that have still pay high prices at the pump.

Cash-strapped Caribbean countries welcomed the pact known as Petrocaribe as a way to counter soaring oil prices. But eight nations say no fuel shipments have arrived yet, largely because they're figuring out how to handle them.

The program bogged down because many governments don't have state-owned docking or storage facilities, or the know-how to run an oil business, a task previously left to private companies.

While Mr. Chavez's critics say he is using "oil diplomacy" to build anti-U.S. political alliances, many Caribbean leaders say they believe the program will be genuinely helpful and are determined to take advantage of it.

The deal is widely seen as a bid by Mr. Chavez -- long at odds with the United States -- to make inroads in the Caribbean, where the United States is a major trading partner. Mr. Chavez calls his pact an alternative to U.S.-backed free-trade deals, and he has sought new oil markets worldwide to reduce reliance on the United States, which remains his biggest customer.

Some nations are still negotiating specific supply deals, while the Petrocaribe pact has continued to grow. Haiti recently signed on as the 14th recipient.

Six countries say they have begun receiving fuel from crude to diesel. Some leaders say they plan to use eventual savings for social programs, and have warned their people not to expect cheaper gasoline as pump prices have soared on the back of a surging world market.