Dominican Republic basks in lower debt from cheaper oil

Santo Domingo.- Plummeting global crude prices have notonly provided the Dominican Republic with cheaper fuel, but has also reduced itsneed to borrow through the PetroCaribe agreement.

The country took US$597.2 million less in financing fromVenezuela last year than in 2013, according to a report by the Debt Directorateof Public Credit.

The report says the country borrowed only US$132.2 million fromVenezuela in 2015, or 80% less than the US$729.4 million in 2013.

The decrease is directly related to the more than 70 percentfall in the price of a barrel from June 2014 to date.

In fact financing from Venezuela fell the most precisely duringthat period, when the PetroCaribe credit fell 404.1 million dollars.

The fall stems from the PetroCaribe energy cooperation agreementstipulation that when the price of oil exceeds US$40 a barrel, Venezuela lends apart of the crude oil sold to the Dominican Republic, with 23 years to repayand a two-year grace period.

The price of crude however has gone beyond that figure duringmonths and as an example, West Texas (WIT) yesterday traded at US$32.7.

Aside from a lower to PetroCaribe debt for the country, theamount outstanding had also fallen, due to an early repayment in 2015.