With the oil price plummeting to US$77 a barrel yesterday, Finance and the Economy Minister Larry Howai is expected to make a statement on the matter in Parliament this afternoon. This was revealed by Energy and Energy Affairs Minister Kevin Ramnarine during yesterday’s post-Cabinet news conference at the Office of the Prime Minister, St Clair.
According to a BBC report, the price of oil initially yesterday slumped to US$72 a barrel after the OPEC oil producers' cartel decided not to cut output at its meeting in Vienna. The 2015 budget was based on an oil price of $US80 a barrel.
Ramnarine said the development was being monitored “very closely” by his ministry, adding it was no surprise after OPEC decided against cutting supply. Howai, Ramnarine said, was authorised by Cabinet to make a statement on the matter today. Howai will speak to legislators on “the issue of oil prices and the impact they will have on the economy and Government revenues.”
Ramnarine said the Government “will also be looking at the gas prices so he will also cover natural gas scenarios too.” He said when he checked yesterday the oil price was below US$70 a barrel.
Ramnarine said: “The analytical work that was done by the Ministry of Finance was based on (a gas price) of US$70 a barrel and a gas price of US$2.75 per mmBtu.”
He said the budget price had been revised downwards to US$70 a barrel and the Government would have to revise the revenue forecast for the economy, based on new price assumptions.
Also contacted yesterday, Howai said budget cuts were "still under review."
Asked if Government would be cutting expenditure since the OPEC decision portended further oil price decline, Howai said in an e-mail: "The matter is still under review, to see how prices react and then settle following the OPEC meeting."
PNM: Detail finances
Opposition Senator and People’s National Movement (PNM) PRO Faris Al-Rawi yesterday said the country remained eternally dependent on revenues earned from the oil and gas sector and the plummeting oil prices were a source of major concern for all citizens.
He said while it was true that T&T’s revenue earned from the spot sale of gas was “higher than the Henry Hub prices, upon which the budget is pegged, it is incumbent on our Government to level with the country as to the true state of our finances and budgetary projections.”
He said that was particularly necessary “since the Government is yet to come clean on the extent of the indebtedness that they have put T&T in.” Al-Rawi said the Opposition awaited the information to be presented by the Government “and in particular, what measures of fiscal responsibility may be necessary in this circumstance, especially since the Government seems hell-bent on nauseating the population with unsolicited, very expensive advertisements on a constant basis.” He said that level of advertising totals “well over $200 million.”
According to Al-Rawi, the Government had spent almost 15 years of annual budgets in the past four-and-a-half years and citizens were complaining that they could not see the evidence of value for money. The House of Representatives meets at 1.30pm at Tower D, Waterfront Centre, Port-of-Spain. — With reporting by Aleem Khan