Government revenues have declined following the sudden decline in global oil prices.
This was confirmed yesterday by Finance Minister Larry Howai, who spoke with the Express at the Magdalena Resort in Tobago, as Cabinet wrapped up its retreat in the sister island.
Howai’s 2014/2015 national budget was pegged on an oil price of US$80 and natural gas price of US$2.75 per mmbtu.
Within recent months there has been a steady decline in prices, with United States crude falling this week to September 2010 lows even though it rallied yesterday to close at US$75.82 a barrel yesterday afternoon.
Despite the decline below the budget price, Howai said there was no need to panic.
“Well, I can understand the need for concern. We need to monitor this very carefully. We need to take a clear-sighted view of what is likely to happen. So I would say that at this time, based on the fact that we have been able to manage our reduction in oil revenues by the fact that we continue to receive income above our budget for our gas,” Howai said.
He acknowledged that Government revenues had declined in light of the drop in oil prices.
“Of course, with the reduction in the price of oil, Government revenue would have declined,” Howai said, adding that it had been expected with the drop in prices.
He said he did not expect any net reduction in revenues, as gas revenues exceeded oil revenues at this point, and he expected this to continue.
“And therefore we expect it is possible that gas prices can come down, and therefore we also have to build in some potential for that happening.”
He said Cabinet needs to discuss the matter. Howai said he had developed potential responses to different scenarios with regard to oil prices.
“What we have not done as yet is we have not been able to make a full presentation of this to Cabinet. We need to schedule a separate time frame to do that.” (Trinidad Express)
