By Jeffrey Todd
Nassau Guardian Business Editor
ORLANDO, USA -- A top official at the US Embassy has cautioned The Bahamas on accelerating its economic ties with Venezuela in an effort to procure cheaper oil.
Alex Sokoloff, political and economics officer in Nassau, noted that there is "no such thing as cheaper oil".
He said oil is a commodity, and as such it will sell for whatever the market is demanding.
Sokoloff was responding to persistent comments from the chairman of Bahamas Electricity Corporation (BEC) Leslie Miller on his intention to court Venezuela and broker more favourable terms for oil.
Miller has highlighted the benefit of "long-term arrangements" to improve the efficiency of the system and fix the country's costs.
Venezuela's membership in international organizations, such as the Organization of the Petroleum Exporting Countries (OPEC), prevents the South American nation from altering the market price.
Instead, a more likely scenario is either a long-term credit burden or other political strings attached to any deal, Sokoloff noted.
"There might be a discount, but it's not cheaper, per se -- it's a loan -- or there are strings attached," Sokoloff told Guardian Business. "I would say beware of Greeks bearing gifts. There is a reason they are offering it. It is because there are strings attached, or a longer term benefit to them."
Sokoloff is one of several US officials leading a Bahamian delegation in Orlando this week for Solar Power International, one of the largest events of its kind in the world.
In Orlando, Miller told Guardian Business that Bahamians should appreciate that the country already buys a great deal of its fuel from Venezuela.
"So this thing about Venezuela being the bad guys … you use it every day. You can use it, but don't mention the word Venezuela," he added.
Miller explained he has no wish to accumulate high debt from the Southern American country.
BEC is now in the midst of an ambitious 24-month plan in an attempt to bring relief to Bahamian consumers on their electricity bill.
Miller revealed that the public corporation hopes to spend $300 million on new and refurbished equipment to boost efficiency. Coupled with that is finding cheaper or more fixed prices on oil from the international market.
After that, BEC is planning on aggressively pursuing capital investments in alternative energy projects.
Sokoloff made the point that the US Embassy does not discourage The Bahamas from trading with Venezuela.
In his mind, The Bahamas should be looking at bringing in sustainable renewable energy solutions much sooner.
"Once you invest in renewable energy, you invest in infrastructure. It's there and won't go away. I don't know the ins and outs of BEC's plan, but will this be an investment for the next 20 years?" Sokoloff asked. "Is this where you want to be in 20 years?"
When a minister in the first Christie administration, Miller faced backlash in certain quarters for his push to have the country sign on to Venezuela’s PetroCaribe oil deal.
The then government eventually opted not to join that alliance, whereby Venezuela provided oil at preferential rates to participating countries.
Republished with permission of the Nassau Guardian