Oil money to flood TT

A flood of petro-dollars is expected to hit Trinidad and Tobago, as the war in Iraq pushes the price of crude oil to almost US$50 per barrel. But up to yesterday no one in the Government could say how this unexpected windfall would be used to benefit the people of Trinidad and Tobago. Last October Prime Minister Patrick Manning predicated the National Budget 2003 on an oil price of US$25 per barrel, but last Friday the price soared to US$49.40 per barrel for sweet light crude oil in New York for October delivery.
      
Despite a small dip to US$47.86 at the close of the market Friday, international commentators have forecast oil prices will stay high and maybe go even higher than US$50 per barrel. Oil prices are high because on one hand the Iraqi oil supply has been halved under the threat of fighting between US forces and the militia of Shi’ite cleric Moqtada al-Sadr, while on the other hand demand remains high from populous countries like China, India and the USA. Locally people are asking how these high global oil prices will benefit Trinidad and Tobago. Manning had said his last $22 billion Budget was to be partly funded by appropriations of $16 billion, but it is unclear if this estimate of revenue is being upwardly revised in light of a virtual doubling of the price of oil.

What is to happen to the extra revenue, people are asking? Where is the money to go? Last Budget Manning boasted of depositing $497 million in 2002 into the Revenue Stabilisation Fund, established to buffer the country’s energy revenues from various price fluctuations. Will he now follow suit and place the windfall money into this fund? Or alternatively does the country need to fund any needy areas, such as social aid? But meanwhile, Opposition Senator Carolyn Seepersad-Bachan was concerned that in the recent past the Government had not been able to publicly quantify the additional revenue from the oil-sector brought on by rising oil prices.

“I, and Mr Yetming, had asked the Government why there were no higher revenues from the petrol sector,” she bemoaned. Recalling the Government’s alleged anomalies in the oil taxation regime, Seepersad-Bachan lamented: “So the Government reported no increase in revenues despite the high prices.” But yesterday no one in Government could be reached to clarify how  the oil bonanza will benefit the country. Minister of Finance, Prime Minister Patrick Manning, was still in Cuba until Thursday. Minister of Energy, Eric Williams, was also out of the country. Minister of Trade Ken Valley could not be reached at a function in South.