The US Virgin Islands government will use "emergency powers" to ensure the territory is supplied with fuel if sole distributor Hovensa carries out a threat to shut down its operations in mid-December, outgoing governor John deJongh said yesterday.
DeJongh did not give details of how his administration would obtain fuel supplies, but said the government had "legal options…to prevent being cut off from needed supplies of fuel."
Hovensa, a joint venture between Venezuelan state-owned PdV and US independent Hess, supplies the islands with gasoline, diesel and propane.
Hovensa will start shutting down its operations on 15 December if the territory's legislators do not approve an operating agreement that would clear the way for the sale of the company's mothballed 350,000 b/d refinery and distribution business, the facility's manager Richard Layton said on 24 November.
The impending shutdown is the result of Hovensa's "deteriorating financial condition," Layton said. "Based on its remaining cash, Hovensa cannot fund operations beyond the middle of December, and our owners will not provide any funds for operations to continue beyond that date," Layton said.
US Virgin Island's legislators delayed a decision on 12 November on whether to ratify an operating agreement between start-up firm Atlantic Basin Refining (ABR) and the government. The legislators' approval is needed to allow ABR to purchase the refinery and fuel distribution business from Hovensa.
"The question is whether the risks of rejecting the operating agreement … are worth taking," deJongh said while encouraging legislators to approve the agreement.
"If legislators decide not to approve the operating agreement in a timely manner, then we will respond to whatever next action Hovensa takes in a way that is in the best interests of our community," he said.
Several legislators have criticized Hovensa's threatened shutdown.
"Legislators must continue their inquiry into the purchase proposal and not be coerced into a hasty, ill-considered ratification," legislator Craig Barshinger said.
"The territory must arrange to purchase gasoline and diesel from other sources. Fuel is a commodity available from many sources. We must not be manipulated or coerced by a single supplier," he said.
"I refuse to be extorted by Hovensa," legislator Terrence Nelson said. "We cannot continue to bend over for this type of bullying. This should be referred to the US attorney general."
The sale of the Hovensa asset should be delayed until there is "a clear and concise understanding of the process," the territory's governor-elect Kenneth Mapp said on 27 November. Mapp takes office on 5 January, succeeding deJongh.
"I am not telling legislators how to do their job, but they should proceed with caution," Mapp said. Several issues must be "clarified" before the sale can proceed, he said.
cj/pg
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