We need to know, Mr Minister

Since there were no call-ins, I would like to get some clarification and would be grateful if anyone could so do.

With the volatility of crude oil prices, we are being told the 2008/9 Budget prediction of US$70.00/bbl still stands in addition to the price on natural gas, a figure not disclosed.

Firstly, is the US$70.00/bbl based on international crude prices or is it based on our indgenious crude? If the latter, it therefore means that our crude (say at a market price US$75.00/bbl) will be fetching far les on the open market.

Secondly, with respect to natural gas, this product is sold at net-back to contracted suppliers at well head.

At this point royalty is calculated. I believe the Minister went on to say that the Ministry does not have the- net back prices and such information can only be had from the various parties concerned. This is an incredible statement.

Be that as it may, it therefore means that not only the net-back prices are far less than the going market prices, but also (and I hope that I have heard him incorrectly) the product changes hand ten to 15 times before it reaches its final destination.

Normally, with products exported, the middlemen via different banking instruments are able to make huge profits so that the final consumer pays close to market price on receipt.

Can the Ministry change their pricing mechanism while depletion of our natural resources continues, so that the middleman is virtually eliminated and perhaps a greater well head price is achieved, thus creating larger cash inflows? Can anyone tell me.

M Persad

Gulf View