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Dominican Republic buys out Shell refinery stake

Dominican Republic buys out Shell refinery stake

The Caribbean country says the deal will help stabilize fuel prices.

May 30, 2008: 4:41 PM EDTSANTO DOMINGO, Dominican Republic (AP) — The Dominican Republic has bought out Royal Dutch Shell PLC’s share of a jointly owned oil refinery in a bid to stabilize fuel prices, the government said Friday.

The Caribbean nation paid $110 million for Shell’s stake in the Refidomsa refinery, Treasury Minister Vicente Bengoa said. The source of the funds will be announced soon, he said.

Business and opposition leaders have criticized the government for the plan, saying it should not meddle in the private sector.

Dominican officials say co-ownership prevented them from expanding the refinery and importing the country’s full fuel quota under Petrocaribe, a Venezuelan program that supplies cheap fuel to poor nations.

The Dominican Republic can import up to 50,000 barrels per day under the program, but has been able to bring in only about 35,000 a day, according to the government.

Residents protested last year against gas prices that currently stand at more than $5 a gallon.

Newly re-elected President Leonel Fernandez has proposed investing in domestic ethanol production and natural gas to slash oil dependence.

Refidomsa, on the outskirts of the Dominican capital, has been in operation since 1973 and produces 30,000 barrels of fuel per day – just under one-fifth of daily consumption.

Shell (RDS.A) will still manage 137 gas stations across the country

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