The seven-week strike in the world’s fifth largest crude producer has affected global oil price and Prime Minister Samuel Hinds has already urged conservation on fuel usage.

Up to November, Guyana had been obtaining its fuel supplies from Venezuela under a 30-day credit arrangement, but this has now been put on hold and fuel is being bought from Trinidad under a cash payment system.

Guyana signed on to the Energy Accord in December 2001 but modalities for its implementation were not complete until December last year when the Contract for Purchase was signed by State owned Petroleos de Venezuela (PDVSA) and the Guyana Embassy in Venezuela. However the strike has put the Accord on hold.

The Accord provides for Venezuela to supply Guyana with a wide range of petroleum products including gasoline, kerosene, dieseline, heavy bunker ‘C’ fuel and aviation fuel.

Before the signing of the Accord, Guyana was required to pay cash for its oil imports. Signing of the Accord now enables a substantial part of the country’s estimated US$69 million annual fuel bill to be diverted to other developmental projects.

Under the Accord, Guyana becomes eligible for developmental loans once the oil price reaches US$15 a barrel. The developmental loan is equivalent to five per-cent of the country’s fuel bill rising to 25 per cent when oil price reaches $30 a barrel. The present price stands at $34.61 a barrel, driven up by a number of factors including the possibility of war on Iraq.

The Accord also provides a 15-year repayment period at an interest rate of two per cent with a one-year moratorium.