PM: US$55 oil estimate to stay for now
PORT SPAIN
Trinidad & Tobago Express
Petroleumworldtt.com
12 31 08
Oil prices rose from a record four-year low average of US$40.98 per barrel to US$47.61 on Thursday and Prime Minister Patrick Manning said this kind of unpredictability is why his administration would not consider dropping the US$55 per barrel oil price used for the readjusted 2008/2009 Budget.
Manning and his Cabinet decided to reduce the oil price for the Budget from US$70 per barrel to US$55 per barrel as part of its $5.3 billion worth in cutbacks to deal with any impact from the international financial crisis as well as lowering oil and natural gas prices.
Manning said that since the Government has no need at this time to use any of the estimated $12 billion in the Heritage and Stabilisation Fund (HSF) or the $5.9 billion in the Infrastructure Development Fund (IDF), it does not have to go back to the Parliament with a new budgeted oil price. He did so during the post-Cabinet news conference at the Office of the Prime Minister in St Clair.
"As of now we have made it clear that there is no need to draw on any of those special funds, as of now there is no need for that and, therefore, there is no need to go back to the Parliament at this time. Go back to the Parliament with what oil price, what oil price would you suggest? It is very volatile," Manning said.
Manning recalled that when he delivered an address to the nation on the situation on November 30, he made it clear that his administration "will keep the situation under constant review".
He said when the mid-term of the fiscal year, March 2009, arrives, a review will be carried out to see "if any further cutbacks are necessary or whatever else we will have to do".
"If by mid-term it is necessary for us to come back to the Parliament to make any changes we will do that but as of now there is no need to panic and you know to do anything that may suggest that it is a volatile situation," Manning said.
He said that even before the Government would considering drawing funds from the HSF it has other savings available such as that in the IDF but "does not think that it will become necessary".
Manning said that since this country makes most of its revenue from Liquefied Natural Gas (LNG) and not oil, it is the natural gas prices that can have more of an impact on the nation's fiscal strength.
He noted that the price of natural gas has seen much less instability than that of oil.
Story by Juhel Browne from Trinidad & Tobago Express
-jbrowne@trinidadexpress.com
Trinidad & Tobago Express
Saturday, December 13th 2008
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