Row with U.S. energy trader worsens Haiti's fuel crisis
JC News|April. 14, 2019
By Anthony Esposito
PORT-AU-PRINCE (Reuters) - A dispute between Haiti and a U.S. energy trading firm is leading to long blackouts and fuel shortages in the Caribbean nation, feeding anger at President Jovenel Moise's government following the collapse of a supply deal with Venezuela last year.
The capital Port-au-Prince’s fragile power grid was dealt a blow when Novum Energy Trading Corp suspended shipments in February, leaving residents without electricity for days and many gas stations with no fuel at the pumps.
Novum says the government owes it $40 million in overdue payments for fuel. Haitian officials did not reply to requests for comment.
The Western Hemisphere's poorest nation, Haiti long relied on fuel shipments from nearby OPEC member Venezuela, which offered cheap financing to several Caribbean nations to buy its gasoline, diesel and other products through a programme called Petrocaribe.
But the scheme fell apart last year due to economic turmoil in Venezuela, forcing Haiti - a nation of 11 million people - to return to international markets.
Novum, which has supplied Haiti with fuel for more than four years, stepped up its shipments as the Petrocaribe deal unravelled. Novum said it supplied 80 percent of Haiti's gasoline and diesel needs last year.
On Feb. 27, Novum anchored a vessel carrying 150,000 barrels of gasoline off Port-au-Prince until the payment dispute could be resolved. The cargo was equivalent to roughly half of Haiti's monthly consumption of gasoline, according to industry experts.
After more than a month waiting, Novum on April 4 said the situation was "untenable" and sent the vessel to Jamaica to take on provisions.
Youri Chevry, mayor of Port-au-Prince, a sprawling city of more than 2.6 million people, said electricity and gasoline shortages had grown worse over the past month as Haiti waited for the shipment.
"It's a very bad situation ... It has a lot of repercussions," he said.
Chris Scott, Novum's chief financial officer, said the vessel would not dock until the government could pay. He said Novum had taken such measures "fairly regularly" since mid-2018 as Haiti started to fall behind on payments after the Petrocaribe programme collapsed.
"They need to pay in order for us to be able to discharge," Scott said.
A government official, who asked not to be identified, said fuel distribution companies in Haiti had not paid the government for gasoline and diesel it purchased on their behalf from Novum. That in turn meant the government could not pay the U.S. company for the fuel.
The official said other companies were still supplying Haiti with fuel. He did not provide details.
The scarcity of fuel and growing economic problems has put basic necessities increasingly out of reach for many Haitians, despite a $229 million loan programme from the International Monetary Fund (IMF) reached last month.
"I'm barely surviving," said 40-year-old Amos, one of scores of hawkers selling black market gasoline on a busy street in the capital. On bad day, he earns little more than 50 cents. "It’s going to be difficult to see change in this country."
Protesters have for months agitated to remove Moise, a former businessman who took office in February 2017. They blame him for inflation running at around 17 percent, the depreciation of the gourde currency, and for not investigating alleged misuse of Petrocaribe funds by public officials.
Between Feb. 7 and Feb. 27, the protests claimed at least 26 lives and injured more than 77 people, according to the Inter-American Commission on Human Rights, though the situation has calmed since then.
Moise has refused to step aside, saying in February he would not hand power to the leaders of violent protests. He pledged his government would take steps to address people's grievances.
Corruption is a perennial concern in Haiti. The nation ranked 166 from 183 countries in Transparency International's global survey of perceptions of corruption last year - only Venezuela had a worse ranking in the Western Hemisphere.
International pressure has grown for an investigation. In a March 20 letter, 104 member of the U.S. Congress asked President Donald Trump's government to support investigations into Petrocaribe in Haiti, pointing to the alleged misuse of $2 billion in low-interest loans under the scheme.
At the height of the Petrocaribe programme, Venezuelan fuel covered nearly 70 percent of Haiti's needs. Venezuela provided long-term financing for the oil on flexible terms, with a maximum 2 percent interest rate and a two-year grace period.
Petrocaribe included a fund for infrastructure and social projects in member countries.
By April 2018, Venezuela was no longer exporting fuel to Haiti, according to documents from Venezuelan state oil company PDVSA seen by Reuters.
After the programme lapsed, Haitian energy companies lacked the hard U.S. currency to be able to buy fuel on international markets, said an executive at one firm, who asked not to be identified.
Andre Michel, an opposition leader looking into the alleged corruption surrounding Petrocaribe, said it was difficult to estimate how much was stolen but the signs of misused of funds appeared compelling.
"No serious projects have been completed: no hospitals, no campus for students, no roads, no housing projects," he said.
An oft-heard lament on the streets of Port-au-Prince is that while politicians pilfer billions, Haitians go hungry. Roads in the city are potholed and the vestiges of a deadly 2010 earthquake can still be seen at practically every corner.
Destine Legagneur, a small business owner, whose shop is a stone's throw from the presidential palace, said Haitians would be scarred by the Petrocaribe scheme for years to come.
"That money is going to have to be paid to Venezuela one way or another," he said. "If it's not me, it's my kids that are going to have to pay."
(Reporting by Anthony Esposito in Port-au-Prince; Additional reporting by Marianna Parraga in Mexico city; Editing by Daniel Flynn and Lisa Shumaker)
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