Sunday, April 21, 2024

T&T making cuts as oil price falls


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PORT OF SPAIN – Government is continuing to slash projects previously budgeted for in light of low global oil prices.

Finance and Economy Minister Larry Howai says Government has shelved a number of projects following the readjustment of the oil and natural gas prices.

They include the New Port of Port of Spain, the Drydock, six economic free zones, the Endeavour Economic Park and downgrading of the extent of work on some of the country’s health centres.

Howai was responding to questions from the Sunday Express on where the cuts and adjustments will be made in the 2015 Budget and the state of Government’s finances in light of plunging crude prices.

He said yesterday Government could suppress expenditure as it saw fit.

On January 8, Prime Minister Kamla Persad-Bissessar announced that despite the fall in energy prices, Government will manage the economy with moderate cuts in expenditure and its social projects will remain untouched.

“The areas of goods and services which the Prime Minister mentioned include expenditures such as promotions, publicity, official entertainment, contracted services, training, hosting of conferences, equipment purchases etc.

“Also included (but not specifically mentioned) are transfers to certain statutory boards and State enterprises such as, for example, Caribbean Airlines which will now have a lower fuel cost.

“In addition, it is expected other initiatives, including some re-engineering of the Government’s balance sheet using, for example, sale and lease back arrangements will also enhance cash flows in the coming months.

“So there are a number of options Government has at its disposal to ensure the process of adjustment can be timed in such a way as to ensure a ‘soft landing’ for the economy,” Howai said in his statement to the Sunday Express.

He observed that further discussion would be had with various ministers on where Government can trim expenditure.

He noted the country’s cash flow has not reached a “critical situation”.

On Friday, the price of oil was about US$48 a barrel while natural gas was US$3.13 per mmbtu.

The Government had based the 2015 fiscal Budget on an oil price of US$80 a barrel and US$2.75 per mmbtu of gas but revised it two weeks ago to US$45 per barrel of oil and US$2.25 per mmbtu for natural gas. (Express)


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