US embassy cable - 02TEGUCIGALPA3492

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. 
 
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