Government says current oil prices are falling within their budget prediction but the prices at present are still cause for concern.
The statement was made by Acting Prime Minister Colm Imbert, at a post cabinet media briefing today. Imbert said the US$45 price was based on the wide basket of crudes that is produced in Trinidad and Tobago and that it converts into a West Texas Intermediate (WTI) price of US$41.50.The Ag. Prime Minister said two measures exist internationally for oil, the WTI, which is the American standard and Brent, which is the British standard.
“Our price converts into a WTI price of US$41.50, so the oil prices are just about what we had pegged the budget on,” he said.
He also said that despite falling within expected projections, the fluctuating price of oil was still a major cause for concern. He indicated that the government is monitoring the situation daily, and taking particular measures in order to manage the situation.
Imbert said that with the oil prices holding within the budget projection, the real issue is that of cash flow because cash came into the Government at different times of the year. Imbert explained that this was because some companies paid cash on a monthly basis while others do so quarterly. He added that the months from September to November were particularly lean because this was when most business pay significant taxes and don’t see revenue until December.
“We are making sure that essentially, expenditure is covered, and there may be one or two things that we may hold back on until January,” he told the media.
Some of the items Imbert said are on hold include development programmes for the construction of infrastructure such as roads and bridges. He indicated that this was possible because ministers needed time to go through all the projects in their development programmes and assess whether they have the capacity and the capability to implement those projects. The budget allocation for fiscal year 2016 for upcoming development programmes is $7 billion.
“That is an area where we can hold back on expenditure because we are aware that the ministers need a little time to get going and therefore the demands, in terms of for money, for infrastructure projects will not come until next month,” he said.
Meanwhile Prime Minister Dr Keith Rowley will be going to London from December 1st to 2nd following the conclusion of the Commonwealth Heads of Government Meeting (CHOGM) in Malta. Communications Minister Maxie Cuffie made the announcement at the post cabinet media briefing, and said Dr Rowley will be meeting with the Chief Executives of various energy companies that operate in Trinidad and Tobago, such as British Gas and Shell. Dr Rowley will be meeting a team of officials from Trinidad and Tobago who will also attend the meeting and will be accompanied by the Permanent Secretary for the Ministry of Energy and Energy Industries, Selwyn Lashley.
Also accompanying the Prime Minister is cabinet subcommittee on energy member, Professor Ken Julien;Chairman of the National Gas Company of Trinidad and Trinidad and Tobago, Gerry Brooks; and Petrotrin chairman Andrew Jupiter.