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Cablegate: Honduras' Petroleum Market Stable for Now, Despite

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS TEGUCIGALPA 003492

SIPDIS

SENSITIVE

GUATEMALA FOR COMMATT:DTHOMPSON

E.O. 12958: N/A
TAGS: EPET ENRG HO VE
SUBJECT: HONDURAS' PETROLEUM MARKET STABLE FOR NOW, DESPITE
EVENTS IN VENEZUELA

1. (SBU) Econoff approached Texaco Caribbean General Manager
Richard Ritter (please protect) on December 30 to discuss
the effect of the oil strike in Venezuela on Honduras'
petroleum and energy needs. Honduras, which is party to an
agreement signed between Venezuela and other countries in
the region to purchase oil at a preferential basis, imports
approximately 50 percent of its fuel needs from Venezuela.
Texaco, which through a fuel port facility at Puerto Cortes,
is responsible for bringing in 65 to 70 percent of all the
petroleum products imported into Honduras.

2. (SBU) Ritter confided that December has been a terrible
month for Texaco's operation in Honduras and that the oil
strike in Venezuela has caused Texaco since November to
reroute at least five vessels destined for Venezuela to the
Gulf of Mexico to buy crude oil on the spot market. So far,
Texaco has not passed the increased costs to Honduran
consumers. There have been recent price increases at the
gasoline pumps related to the rising cost of oil on world
markets, but Texaco's actions are absorbing some of the
costs. Electricity prices, which are based on a formula
using oil prices from two months earlier, are actually
expected to fall in January.

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3. (SBU) Ritter affirmed Texaco's commitment to meeting all
of Honduras' fuel and energy needs and will continue to
absorb the extra costs through the month of January. Ritter
warned though, that he does not know if Texaco will be able
to continue the practice after January if the situation in
Venezuela worsens and/or events in Iraq lead to further
spikes in world oil prices.

Palmer

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