Back at US$25 per barrel

WE SUPPOSE we have to thank the government for vouchsafing to inform the country, on the eve of the 2004-2005 Budget presentation, that despite the astronomical rise in the price of oil, TT will not be reaping the kind of petro-dollar windfall that we have all come to expect. Indeed, we have just been told that so small are the benefits the country will derive from the skyrocketing oil price, now topping an all time record of US$52 a barrel, that the new Budget will again be based on an oil income of US$25 per barrel. This, in itself, presents a mystery to us which we expect Mr Manning in his Budget Speech today, or relevant ministers in their contributions to the debate later, will seek to clarify.

So far this year, according to Minister in the Ministry of Finance Conrad Enill, TT’s crude oil has fetched about US $32 a barrel which again strikes us is puzzling since the world price has been hovering close to US$40 for quite some time after rising steadily for months. But why, in any case, is our crude fetching such an inferior price? Is not our condensate a high-quality petrocarbon? In light of this, we must also wonder what would our country derive if, as some experts predict, the international oil price zooms to the unbelievable level of US$60 per barrel? Will TT then not earn a quantum of oil revenues beyond its wildest dreams? Would we not then acquire the wherewithal to solve most of our urgent problems?

But apart from our fortunes in oil, the TT economy is supposed to be booming also on its massive production of natural gas, the price of which is rising and set to go steadily higher as a result of increasing demand in the US. Minister Enill, for whatever reason, has chosen to remain silent on the country’s income from this prosperous sector and the kind of contribution it is expected to play in financing budgetary measures and diversifying the economy. There seems no need to impress upon the Government the growing concern among the populace over the disparity between, on the one hand, an apparently booming resource-rich economy and, on the other, an intolerable level of poverty together with distressing problems in law enforcement, health care, employment, education, housing, transport, physical infrastructure, public amenities, the environment, drainage control, traffic management and social services. If a small country like ours, blessed with such enormous natural assets, cannot provide, for example, a decent system of health care for its population then what does that leave us to say?

It must also be a source of disappointment that the Government has failed to keep its promise to finalise by January this year a new oil and tax regime. Minister Enill’s explanation for this is the complex nature of the exercise, claiming that more time was needed to better understand the data received. How long has this study been going on, who is engaged in it and when will it be finally completed? The new regime, we expect, will result in an upgrading of the tax being paid by companies operating in our oil and gas sectors and the longer it takes to complete, we presume, the more revenues TT will eventually forfeit. The thrust of today’s Budget, we expect, will be used by Mr Manning as an instrument to advance the country in the direction of his 20/20 vision. In such a pursuit, we also hope to see a more significant application of the country’s economic wealth to easing the burdens of our society as a whole.