Haiti is running out of fuel — again.
Gas stations are stockpiling and rationing gasoline. The poor are running out of kerosene to cook. Private power suppliers, out of diesel for the past 11 days, are reducing or ceasing production — taking Haiti’s already desperate electricity issues from bad to worse.
Twelve months after Venezuela stopped delivery of cheap oil under its energy-assistance PetroCaribe program, forcing Haiti to buy all of its petroleum products on the Caribbean and U.S. spot markets, Haiti’s energy woes have grown into an almost monthly panic as the country’s bankrupt government insists on maintaining control of fuel imports despite its inability to pay.
“It’s become a mess for [them] to deliver,” said Pierre-Marie Boisson, a Port-au-Prince economist and founder of Société Générale de Solidarité (SOGESOL), one of Haiti’s three largest microfinance companies.
The latest symbol of the dysfunction: Since Feb. 27, about 150,000 barrels of gasoline have been sitting in a ship off the coast of Port-au-Prince in international waters awaiting more than $37 million in overdue payments from the Haitian government’s Bureau of Monetization of Programs and Development Aid, or BMPAD.
The owner of the cargo, Houston-based Novum Energy, said it is owed $58 million in arrears, not including the $11 million for the gasoline currently sitting off the coast.
“My priority is to get some payment so I can discharge this cargo,” said Chris Scott, Novum’s chief financial officer. “We have not received any payments … and as of right now have no idea when we are likely to get any either — we are not getting any information whatsoever.”
As part of its agreement with Novum, which had been winning most of the government’s energy bids, Haiti enjoyed 45 days payment terms. But payments, Scott said, have being repeatedly delayed, prompting the company in January to keep two shiploads at bay while fuel pumps and generators throughout Haiti ran empty.
“We’ve been doing this for four-and-a-half years and only since the collapse of PetroCaribe has this been a problem,” Scott said.
The latest arrears prompted Novum this week to issue a press release explaining why another one of its fuel ships was not off-loading. The release also went on to explain that after running up $69 million in credit, BMPAD was effectively squeezing Novum out of the Haitian fuel supply market.
Scott said BMPAD issued a request for bids in February for fuel to be delivered during two different periods in March. Novum put in bids and was then notified that the contract had been canceled. Three days later, the fuel request was re-posted, but this time with a caveat: In order to bid, a company needed to have a local registration number that was at least two years old.
“There are no requirements anywhere in the world where you need to have a local registration,” said Scott. “The reality is if BMPAD continues to put in this requirement to be a domestically registered company, then Novum will no longer be able to submit [bids]. We cannot comply. Neither can any international company.”
Scott said Novum put in a bid anyway. His company’s offer, he said, beat out competitors including local Haiti competitor DINASA, which is a subsidiary of the French Rubis Group. Scott said Novum has yet to receive official word about who won the bid request but has learned that DINASA has two cargo ships filled with fuel bound for Haiti.
“And this is also despite the fact we still have a gasoline cargo there that we have a contract to deliver and we are still awaiting payments for,” he said.
In its release, Novum said that if it is eventually disqualified, DINASA will ultimately charge the people of Haiti $700,000 “more than the real ‘best’ price available. … Furthermore Haiti will run out of gasoline imminently since not one other company supplied a price at tender.”
Firing back with its own press release, DINASA said it has nothing to do with BMPAD’s decision. Company head Luc Maiche told the Miami Herald that its 275,000 barrels of diesel and 74,000 barrels of kerosene that are en route to Haiti are $360,000 cheaper than Novum’s offer.
Ignace Saint-Fleur, who heads BMPAD, said that he refuses to enter a debate over Novum but that the company did not meet the new requirements. He said BMPAD is awaiting payments from the oil companies in Haiti in order to pay Novum the arrears it owes on fuel.
“There is no gas crisis,” he said.
Haitians monitoring the fuel war between Novum and DINASA say the recurring fuel shortage crisis goes beyond the companies’ spat or even BMPAD’s poor handling of the latest round of bidding. The spat, like the fuel crisis, is symptomatic of the government’s continued mismanagement and misguided intervention in matters that should be handled by private businesses, they say.
“When you have government messing around and managing things that should be managed by the market, you always have that type of situation; you always have that type of hidden corruption, preference, mismanagement,” Boisson said.
Unfortunately for Haiti, the fuel war is coming as the country finds itself knee-deep in a political and economic crisis. As the government struggles to keep cars running and the lights on, the opposition is calling for the resignation of the president and the cost of living is skyrocketing.
“Anytime you have a fuel shortage in Haiti you have a mess, because it impacts everyone,” Boisson said. “A lot of people in Haiti are running on private generators and when they don’t have fuel, it impacts on a lot of different activities.”