FROM near-record highs in May, fuelled by the Russia/Ukraine war, world energy prices plunged sharply by five per cent overnight between Thursday and Friday, casting fresh doubt on any expected “goodies” a stressed out population can expect in Monday’s budget.
West Texas Intermediary (WTI) oil prices fell by almost a quarter from US$97 in late August, to US$78 on Friday. Natural gas fell from US$9.36 MMBtu to US$6.85 MMBtu.
Energy prices are where they were a year ago, before shooting up over supply-fears due to a European embargo on Russian oil and gas, since snapped up by China and India at cut-prices.
All this as the world faces a recession amid food shortages blamed on the protracted war in eastern Europe, plus post-pandemic public debts locally and globally.
Economist Vaalmiki Arjoon recently told Newsday of “a deepening cost of living crisis,” for the middle and lower income brackets, with the highest prices being seen by many in decades.
Food relief will be sought, after last budget’s VAT cut on biscuits, cooking oil, ketchup, bottled water, and pigtail.
Last month, thousands of workers protested in Port of Spain against stalled wage-negotiations as trade unions rejected the CPO’s four per cent offer for 2014-2019, with OWTU head Ancel Roget threatening to “shut this blasted place down.”
The Prime Minister has already said (in the Government’s Spotlight on the Economy event in September) that high energy prices would likely not last.
He had said TT must make best use of its finite resources to look after its people, but that does not include any entitlement to cheap fuel.
Economist Dr Marlene Attz recently told Newsday that TT was in “a very uncertain economic time” where bigger economies could intervene to flatten global energy prices. “It is unsustainable for us to assume a windfall in perpetuity. We don’t know when the windfall will end.”
The Energy Chamber urged boosted gas production by incentivising firms to explore, by quicker bid rounds, more tax-breaks (VAT, royalties), help for small and mature field development, and help to cut the carbon intensity of operations (e.g. in methane emissions and flaring).
Divert gas from domestic electricity generation by way of energy efficiency and renewables, it added.
The chamber advocated more cross-border supplies, saying flared gas in the North Monagas oilfields in eastern Venezuela exceeded TT’s shortfall.
The Government will also likely promote non-energy diversification: manufacturing, agriculture, tourism, and the creative sector. TT Manufacturers Association (TTMA) head Tricia Coosal on Friday in a text message, told Newsday, “The TTMA looks forward to the reading of the 2022/23 fiscal package with great anticipation.
“As the TTMA pursues its goal of doubling local non-energy exports by 2025, it is our hope the Government continues to support this thrust towards diversification as has been done in previous budgets.”
Another revenue source, recently mooted by Arjoon, was better tax collection.
Imbert told the spotlight event of $7 billion being owed in taxes, citing the proposed TT Revenue Authority (TTRA) which last year’s budget proposed to staff with 100 university graduates.
