OIL-RICH Venezuela is to sell cheap fuel to 13 Caribbean nations, in what analysts say is part of President Chávez’s left-wing challenge to American and European influence in the region.

The announcement came at the end of a two-day summit in Venezuela where Señor Chávez pledged to create an “energy alliance” to protect small Caribbean islands from the “squandering” of oil resources by wealthy nations.

The PetroCaribe energy pact will mean large savings for small Caribbean islands that are struggling to cope with soaring world oil prices and which feel neglected by traditional allies such as Britain and the US. Under the plan, Petroleos de Venezuela, the state oil company, will pick up 40 per cent of the cost if oil is selling at more than $50 a barrel. Venezuela promised further concessions, should prices hit $100.

Venezuela is putting $50 million into a start-up fund, and Petroleos de Venezuela announced that it would also pay for oil shipment costs and help to construct storage facilities throughout the region.

Trinidad and Tobago, an oil and gas producer, declined to join, noting that the deal could undercut its own oil shipments. Barbados also opted out, but countries such as Jamaica, Belize and the Bahamas welcomed the pact.

P. J. Patterson, the Prime Minister of Jamaica, told the meeting of Caribbean leaders, including President Castro of Cuba: “For the countries of the Caribbean, PetroCaribe represents a welcome lifeline.”

Venezuela is the world’s fifth-largest oil exporter, producing 3.1 million barrels a day. It is a leading oil supplier to the US, but Señor Chávez is seeking to develop diversified energy ties with the Caribbean, Latin America and Asia. Venezuela already sells oil to Cuba at preferential prices. In return, Cuba has sent more than 17,000 doctors, nurses and physical trainers to Venezuela to improve public health.

Analysts say that the plan is part of an effort by Señor Chávez to use “oil diplomacy” to win international support for his left-wing revolutionary movement. PetroCaribe potentially assures him of a new bloc of votes at forums such as the UN and the Organisation of American States.

Señor Chávez’s wooing of the Caribbean is also part of his “anti-imperialist” strategy to turn the continent away from traditional US influence. Señor Chávez is also promoting a regional oil pact in South America called PetroSur, as well as a continent-wide Spanish- language TV news station, TeleSur, to go on air this month as a rival to CNN.

While Señor Chávez’s generosity may win friends in the region, domestic critics say the country cannot afford such largesse. Despite enormous social spending in Venezuela during the past six years under Señor Chávez, the percentage of Venezuelans living below the poverty line has risen from 43 to 54, according to government data.

Señor Chávez accused the US of trying to scupper the oil pact by writing to Caribbean leaders warning them of his alleged undemocratic tendencies. The letter also accused him of using Venezuela’s oil to try to destabilise countries such as Bolivia and Ecuador by supporting radical groups, he said.

US officials accuse Señor Chávez of stoking up anti-US sentiment in Latin America.

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