Gov’t attributes billion-dollar loss to oil price reduction

By Admin Wednesday January 21 2015 in Caribbean
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PORT-OF-SPAIN: The Government of Trinidad & Tobago has reiterated its stance that the drop in oil prices on the global market is not a signal for a sudden change in its economic development policies.


“We have the capacity, we have the will and we have passion to secure our future and we will emerge stronger, together,” said Prime Minister Kamla Persad-Bissessar at a meeting with the nation’s business leaders last week.


Oil prices have dropped significantly from a high of US$104 a barrel in June to less than US$50 a barrel last week.


The government said that Trinidad & Tobago has lost approximately $TT7.5 billion as a result of the drop in oil prices. In an address to the nation last week, Persad-Bissessar said her administration would try to lessen the impact on the local economy.


A government statement issued after the talks said that Persad-Bissessar held an “important conversation with the business community” and that “representatives endorsed the approach taken in dealing with the current environment, and expressed their commitment to working with the Government on projects and initiatives to further expand the economy”.


The statement said Persad-Bissessar assured “business people that she would ensure that the present challenges are managed in a way that places people and country first, and also a strong focus on preserving the economic and social stability.


“She noted that the Government’s first approach includes review of our PSIP (Public Sector Investment Program) and recurrent expenditure with the aim of identifying savings of approximately TT$4.5 billion (one TT dollar=US$0.16 cents).”


Persad-Bissesar said that further savings would be derived from a lower oil price, which would generate a lower demand on Government for the petroleum subsidy.


“With the best made plans, accelerating development, increased growth and stability, it is the people we depend on to make it happen,” she said in the statement. “Sectors cannot expand, the economy cannot grow, the future cannot be secured unless the policies we implement and the vision we pursue place the people as the drivers of progress.”


The statement said “business people endorsed the statements made by Prime Minister Persad-Bissessar and welcomed the thrust to engage the private sector in Public-Private Partnerships” and that the business representatives had identified “two issues that are critical to their operations – shortage of labour and foreign exchange”.


The statement said that the Minister of Finance and the Minister of Trade, Industry and Commerce were mandated to meet as a matter of urgency to develop a sustainable plan to manage foreign exchange supply.

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