Although there is a decline in revenue from the country’s largest income sector – oil and gas – Finance Minister Colm Imbert on Wednesday did not address the issue of fuel liberalisation.
As he presented the mid-year review in Parliament, Imbert said the weighted average price for local crude oil from October 2020 to April 2021 was US$52.76, which was above the budgeted figure of US$45.
He added that the average production for the period October 2020 to May 2021, was 57,089 barrels per day, which was below what was used in the October budget and oil production was also below what was budgeted in October.
“Natural gas prices are below the forecast, oil prices are above the forecast, whereas oil production is a bit below. Since we get two-thirds or more of our revenue from natural gas and one-third or less from oil, the lower production and prices of natural gas has affected us significantly.
“There has been a significant reduction in revenue from the natural gas sector.”
Previous budget deficits had promoted government’s decision to move towards liberalisation of the liquid petroleum fuel market. Imbert explained in October’s budget presentation that government was unable to bear the hefty burden of gas subsidies which amounted to almost $25 billion between 2006 and 2020.
[caption id="attachment_894425" align="alignnone" width="1024"] Finance Minister Colm Imbert. PHOTO COURTESY OFFICE OF THE PARLIAMENT -[/caption]
But, on Wednesday plans for the initiative were not mentioned.
At the time of Imbert’s announcement in October 2020 global oil prices were US$39.22 and US$41.29 per barrel for WTI Crude and Brent Crude, respectively. On Wednesday, the prices were US$70.05 and US$72.22.
With the reeling effects of the covid19 pandemic from 2020 into 2021, that has shattered economies and livelihoods around the world, former energy minister Kevin Ramnarine has called on government to defer its plans on fuel liberalisation until the economy recovers from the blows of the covid19 pandemic.
Ramnarine told Business Day that TT, like other countries were still grappling with ways to stay afloat.
“The circumstances greatly changed since the last budget was read, and no one could have envisaged what the country would experience in May and June, and beyond.
“Given the current circumstances of an economy that has been ravaged by covid19, the decision to remove the fixed retail margins on transport fuels should be deferred until 2022. In the circumstances, the government needs to empathise with what is happening on the ground in this country.”
Ramnarine, last year expressed his full support for government’s move, stating that it was a step in the right direction and if Imbert gets rid of the subsidy, he should also get rid of the levy.
But Ramnarine also cautioned that if oil reached to the range of US$60-$70 per barrel, government may have to reconsider their strategy by putting a cap to the prices at the pump and to intervene
