Dominican Republic basks in lower debt from cheaper oil
Santo Domingo.- Plummeting global crude prices have not only provided the Dominican Republic with cheaper fuel, but has also reduced its need to borrow through the PetroCaribe agreement.
The country took US$597.2 million less in financing from Venezuela last year than in 2013, according to a report by the Debt Directorate of Public Credit.
The report says the country borrowed only US$132.2 million from Venezuela in 2015, or 80% less than the US$729.4 million in 2013.
The decrease is directly related to the more than 70 percent fall in the price of a barrel from June 2014 to date.
In fact financing from Venezuela fell the most precisely during that period, when the PetroCaribe credit fell 404.1 million dollars.
The fall stems from the PetroCaribe energy cooperation agreement stipulation that when the price of oil exceeds US$40 a barrel, Venezuela lends a part of the crude oil sold to the Dominican Republic, with 23 years to repay and a two-year grace period.
The price of crude however has gone beyond that figure during months and as an example, West Texas (WIT) yesterday traded at US$32.7.
Aside from a lower to PetroCaribe debt for the country, the amount outstanding had also fallen, due to an early repayment in 2015.
Feb 5, 2016
Category: DR News |