14391: This Week in Haiti 20:43 1/8/03 (fwd)

[Bob Corbett <corbetre@webster.edu>]

"This Week in Haiti" is the English section of HAITI PROGRES
newsweekly. For the complete edition with other news in French
and Creole, please contact the paper at (tel) 718-434-8100,
(fax) 718-434-5551 or e-mail at <editor@haitiprogres.com>.
Also visit our website at <www.haitiprogres.com>.

                           HAITI PROGRES
              "Le journal qui offre une alternative"

                      * THIS WEEK IN HAITI *

                         January 8 -14, 2003
                          Vol. 20, No. 43

FUEL PRICES SOAR IN HAITI, KINDLING DESPERATION AND CHAOS

Rising crude prices, a plumetting currency, and a lack of
government planning have resulted in a huge spike in fuel prices
in Haiti, which provoked a massive nationwide transport strike on
Jan. 7.

Drivers affiliated with the CTH, OGITH, FNTS, SOS Transport, COH
and six other unions effectively shut down Port-au-Prince and
provincial cities to demand that the government reinstitute state
gas subsidies which were cut on Jan. 1.

Schools, banks, and large businesses were closed. Only a few
buses of the public transport company Service Plus circulated,
and private vehicle traffic was light. Most motorists were
reluctant to pass through the burning-tire barricades set up
around the capital for fear of losing their windshields or even
their lives.

Violence flared in several places. In the capital's Carrefour
district, two people were wounded by gunfire, and a student was
killed in nearby Martissant.

The Washington-backed Democratic Convergence front rushed to
support the strike, as it does any action which will weaken and
destabilize the government of President Jean-Bertrand Aristide.
"With the price they are putting on gas, the government is in
effect assassinating the Haitian people," said Rosmond Pradel, a
Convergence spokesman.

The unions took no distance from such hyperbole and, in a Jan. 6
statement, displayed even greater class unconsciousness than
usual by needlessly appealing to Haiti's anti-Aristide
bourgeoisie "to show their solidarity with the Haitian syndical
movement by closing their commercial, industrial, and service
enterprises on Tuesday Jan. 7, 2003."

The unions said that if the government does not meet their
demands they will strike again on Friday, Jan. 10.

Gas shortages, price gouging, and black marketeering began in
mid-December, but Haitian officials were slow to react to the
crisis. By Dec. 24, it was practically impossible to find gas in
Haiti's cities. Some gas stations closed altogether. Others were
mobbed by people looking to buy diesel, gasoline, or kerosene.
Black marketeers sprang up nearby the pumps. "The gas station
owners and workers are just selling fuel on the side," said one
driver in Gonaïves. On the black market, a gallon of gasoline or
diesel was selling for up to 175 gourdes ($4.73) , and kerosene
up to 100 gourdes ($2.70).

There was temporary relief on Dec. 29 when two gas tankers with 8
millions gallons of fuel arrived in Port-au-Prince. "There will
be enough gas for everybody," said Commerce Minister Leslie
Gouthier.

But the gas lines and high prices continued. Bus and taxi fares
began to rise. Buses to Pétionville and taxis went from 7 to 10
gourdes (27 cents). Buses from Port-au-Prince to Carrefour went
from 10 to 15 gourdes (40 cents) during the day, and 25 gourdes
(68 cents) in the evening. Previously, the official bus fare for
such trips was only 3.5 gourdes (10 cents).

Meanwhile, in the provinces, fares doubled. The arbitrary and
anarchic price hikes caused huge yelling matches, and sometimes
fist-fights, between drivers and passengers.

The Federation of Haitian Public Transporters (FTPH) did not
support the strike call. Instead its leaders met with the
Commerce Minister to fix official prices for various routes. For
example, standard taxi service which had risen from 7 to as high
as 15 gourdes was fixed at 13 gourdes (35 cents). The buses going
from Bourdon and Delmas to Pétionville, which had spiked to 10
gourdes, were lowered to 8 gourdes (22 cents), as well as the bus
from downtown Port-au-Prince to Carrefour.

Only eight years ago, fuel prices were less than half what they
are today. Kerosene sold for 23.85 gourdes a gallon in 1995, then
it rose during the term of President René Préval to 26 gourdes,
but has now leapt 96% to 51 gourdes a gallon ($1.38). Gasoline
went from 39.75 gourdes in 1995, to 56 gourdes under Préval, but
has now had a 52% increase to 85 gourdes a gallon ($2.30). Diesel
is now 55 gourdes a gallon ($1.49), up from 30.50 gourdes, an 80%
increase.

With chaos mounting at the pumps, finally the government reacted
on Jan. 3, when the Commerce Ministry issued a communique fixing
new gas prices. The changes, according to the communique, took
effect Jan. 1, 2003.

Since October, the Haitian government has spent some 500 million
gourdes ($13.5 million) to subsidize fuel prices, Haitian
economist Claude Beauboeuf told the Associated Press, which has
helped deplete Haiti's dollar reserves to less that $50 million.
Fuel is purchased with dollars but sold for gourdes. With the
value of the gourde slipping to nearly 37 per $1, the subsidies
have become untenable.

Not until Jan. 6 did Gouthier hold a press conference to try to
explain to the Haitian people the factors contributing to the
fuel price hikes. He cited the rising costs of world crude prices
due to the protests in Venezuela, where Haiti previously got most
of its fuel, as well as George W. Bush's impending war against
Iraq. On the world market, a gallon of crude which sold for
$25.50 in November 2002 rose to $32.68 a barrel at the end of
December, up from $20.41 a barrel a year earlier..

"We don't have a crystal ball, so we can't foresee what will
happen with fuel prices," Gouthier said. But, clearly, these
crises could have been foreseen, or at least prepared for, by
Haitian officials.

Gouthier pointed a finger at Haitian fuel distributors. He warned
gas station owners that he knew some were hoarding gas to create
a shortage and sell it on the black market. "It is your
responsibility, if you have gas at your station, to give the
service you should," Gouthier warned. "Pumps have hours to be
open and hours to be closed." He threatened sanctions against
owners caught hoarding. "We will be going to stations in
provincial cities because the public must find the gas it needs,"
he said, pledging that inspectors would ferret out any "monkey
business [magouy] in gas sales."

Gabriel Zéphyr, Commerce Ministry director, said at the press
conference that Washington's blockage of $500 million in
multilateral loans was another factor which prevented the state
from subsidizing gas prices.

The National Association of Petroleum Product Distributors
(ANADIPP) sought to place all the blame for the rise in gas
prices on the Lavalas regime. Max Romain, an ANADIPP spokesman,
argued that only the government's refusal to subsidize gas was
causing the price rise, while in the same breath asking"for us
[ANADIPP] to get merely an additional 2 gourdes on each gallon."

But already ANADIPP and the oil multinationals it represents,
like Shell, Exxon, and ELF, make tremendous profits off gas sales
in Haiti, as illustrated by the gleaming gas stations which float
like luxury islands on a sea of misery. On every gallon of
gasoline, the oil company makes 8.47 gourdes and the distributor
makes 7.31 gourdes. On each gallon of diesel, the company makes 6
gourdes and the distributor makes 4.29 gourdes profit. On
kerosene, the company makes 4.96 gourdes, and the distributor
4.44 gourdes.

Haïti Progrès contacted the Commerce Ministry, Exxon, Shell, and
ANADIPP for additional information and comments on the crisis,
but found no one who could or would answer questions.

Already, fuel prices are pushing food prices higher. For example,
a sack of corn rose from 400 to 420 gourdes ($11.34) and a sack
of flour from 700 to 750 gourdes ($20.25).

Unfortunately the government has handled the situation badly,
giving the Republican-backed Haitian opposition further
ammunition for their destabilization campaign. Compounding its
lack of foresight, the Haitian government continues to bow to
pressure from institutions like the World Bank and International
Monetary Fund (IMF). The latter has long pushed for the
government to lift gas subsidies as a condition to release a $50
million loan, part of the $500 million being held up.
Furthermore, the government could conserve its dwindling cash
reserves by declaring a moratorium on the interest payments of
nearly $5 million monthly for debts rung up by U.S.-backed
dictatorships.