Caracas, February 21, 2007 (venezuelanalysis.com)— Venezuela’s Foreign Minister Nicolas Maduro and London’s Mayor Ken Livingstone signed an agreement yesterday according to which Venezuela would provide discounted diesel fuel in exchange for advice on public transportation, environmental protection, tourism, and city planning.
According to the deal, which Chavez had promised in mid 2006 while he was visiting London, Venezuela’s state-owned oil company will provide 50 million liters of diesel at a 20% discount for its fleet of 8,000 buses. The deal will allow the city of London to provide 250,000 Londoners half-price bus tickets.
Livingstone said of the agreement, “This agreement will benefit up to a quarter of a million of the lowest income Londoners. Those on income support will be eligible to receive half price bus and tram travel – a benefit worth at least the equivalent of £280 a year.”
Foreign Minister Nicolas Maduro said of the deal, “This agreement will strengthen relationships between the peoples of London and Venezuela. It is a win-win strategy that fits within the policy of integration and the character of the Bolivarian Government of President Hugo Chavez.”
Venezuela has engaged in several similar oil for goods or services deals, such as with Cuba, where it provides Cuba oil on favorable terms in exchange for Cuban doctors who work in Venezuela’s poor neighborhoods. In another project, the Venezuelan owned gasoline refiner and distributor Citgo provides discounted heating oil to hundreds of thousands of poor communities in the U.S.
“Other programs by Venezuela to reduce the impact of energy prices on the least well off sections of society, such as Joseph P Kennedy II’s Citizens Energy programme in the US, have used this for heating homes. However in London too few people use this form of heating for it to be effective whereas London’s transport system, in particular its bus network, is one of the largest in the world and used by all parts of the population,” said Livingstone.
For London, the agreement will save the city $32 million out of its busses’ annual $200 million fuel bill.
The agreement was criticized by London assembly Conservative spokesman Richard Barnes who said, “I think that for one of the richest cities in the world to be getting foreign aid like this is indefensible,” reported the Guardian.
Supporters of the deal argue, though, that both countries gain from the deal. “Each partner is drawing on something that for them is relatively cheap but for the other is vital and expensive,” Livingstone said.