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London - Venezuela Oil Deal Explained

By Alek Boyd

London 04.06.08 | Former Mayor of London Ken Livingstone seems to be every bit a sore loser as his militaristic caudillo mate from Venezuela. In a rather pathetic attempt at justifying the 'oil deal' that he signed with Chavez, Livingstone wrote recently "A piece of mindless vandalism" for Comment is Free. If there's somebody who could be defined as vandal, that is Ken Livingstone, who not content with wasting Londoners' tax money in his deranged and megalomaniac 'foreign policy' gigs, had the bloody chutzpah of taking money from an utterly under-developed country to prop up his political standing. His piece needs some debunking.

Right from the start Livingstone lies about the nature of the deal:

"The agreement was that Londoners on income support received half-price bus travel, subsidised via cheap Venezuelan oil, in return for London providing transport, planning and other expertise to Venezuela."

To call this misleading would be an understatement. This is a complete fabrication, for Venezuela, or rather the country's oil company (PDVSA), agreed to pay up to 20% of the volume of diesel purchased by TfL bus operators, at full UK market prices, in hard cold cash, upon notification to TfL . No cheap Venezuelan oil subsidised half-price bus travel for Londoners on income support, as hearing of the Budget Committee to determine the oil-deal's utilized mechanism determined. As Liberal Democrat Member of the Greater London Assembly Mike Tuffrey stated: "That is absolutely, demonstrably incorrect. London's bus fleet will not use subsidised oil from Venezuela... It is charity. It is not subsided oil from Venezuela."

Rather, Chair Sally Hamwee had this to say about the deal during the hearing: "Can I just come back to the first point you made, which is the title of the agreement, 'An Energy Funding Contribution', because I do - again it is just for clarity - query that. This month's edition of The Londoner says that this deal means London's bus fleet will use subsidised oil from Venezuela leading to a massive 20% reduction in the price of fuel. Well, it seems to me that that is inaccurate. It ends by saying that the arrangements will simply enable the existing quantity of oil to be bought more cheaply. That does not seem to be accurate either and that the fuel bill discount (which is not what it is - it is a mechanism) will be calculated on the prevailing world price of oil; but it is the UK price."

Then we have the issue about number of people that purportedly benefited from the program: Livingstone argues is 130,000, however former London Assembly's Tory Leader Bob Neill stated that only 10,000:

"It just comes on again to this point about accuracy because I do hope, Chair, that we will make a formal request for the false report in The Londoner, letís be blunt about it, to be corrected because the use of the words 'London's bus fleet will use subsidised oil' is not a misdescription - it is wholly misleading. Can I also point out in the same context that, Murziline [Parchment], you have referred to the subsidy and people on Income Support, The Londoner in that same issue said 130,000 carers on Income Support will benefit. Factual point before you move on, Chair, in fact Government figures which you obtained, Chair, and which the Mayor himself has quoted, show there are only 10,000. So when there have been two serious misleading elements in The Londoner that then seems to me that that ought to be corrected."

TfL's involvement in the deal cost £100,000 to Londoners. However, as per 22 March 2007, time of hearing, Stephen Critchley, Chief Finance Officer of TfL said "I do think one thing that is very important to identify is that it is not yet agreed between TfL and the Venezuelan side as to the exact nature of that technical assistance." That is to say, despite Chavez's up to $32 million a year charity contribution to London, nothing had been put in writing laying out clearly how would Venezuela benefit from the deal.

Please do visit the following link to understand the true nature of this subsidy calculating formula, based on the prevailing price of oil

Hugo Chavez, benefactor of Colombia's narcoterrorists, still has a supporter in Ken Livingstone. So how does one define a former civil servant who cheers for somebody who openly supports terrorism?

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