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Administration Urged to Negotiate for Lower Oil Prices

July 27, 2006 – John deJongh, Democratic candidate for governor, today urged Gov. Charles Turnbull to negotiate for lower oil prices for the U. S. Virgin Islands in order to bring "financial relief to our residents who are saddled with drastically rising electricity costs and gasoline pump prices."
"The government should go directly to Venezuela and Hess Corporation, as the parent companies of HOVENSA, to start negotiations on lower oil prices," he suggested.
HOVENSA is a 50-50 joint venture between subsidiaries of the Hess Corporation and Petroleos de Venezuela S.A. (PDVSA), the national oil company of Venezuela, which provides the bulk of crude oil to the St. Croix-based company.
DeJongh said, "PDVSA has considered similar appeals in the past, like in November of 2005 when it and subsidiary Citgo provided heating oil to low income residents of Massachusetts at a discounted cost of 40 percent below market. The basic assumptions of the 1998 agreement between Hess and PDVSA that resulted in the joint venture HOVENSA never contemplated such increases in oil and therefore fuel prices. The government and HOVENSA have had and will continue to have a long-term relationship, but we must make sure it is seen as beneficial to all parties, and it is in this vein that we need to sit down at the table to come to a new and better arrangement on the underlying pricing of the refined product in our territory," deJongh said.
DeJongh said that action toward the resolution of increasing prices was heightened when the V. I. Public Services Commission recently granted the V.I. Water and Power Authority a 6 per- cent increase to cover rising fuel prices and with HOVENSA's increase in its rack rate earlier in the month.
"Our residents are suffering from unprecedented fuel prices and I believe that a solution cannot be developed after the election but must start now. Additionally, I suggest the Governor organize a working group comprised of officials from HOVENSA, WAPA and the V. I. Energy Office to comprehensively develop and implement solutions that will result in a coordinated action plan on a territorial basis," concluded deJongh.

Editor's note: John deJongh is running as a Democrat for the office of governor in the next election.

Editor's note: We welcome and encourage readers to keep the dialogue going by responding to Source commentary. Letters should be e-mailed with name and place of residence to source@viaccess.net.

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