Browne: No need for T&T government to adjust Budget
By Juhel Browne, Trinidad ExpressOctober 13, 2008 02:09:00 PM
There is no need for the Government to reconsider lowering the US$70 per barrel price on which the 2008/2009 Budget is based even as global crude oil prices are now hovering at around US$77, says Minister in the Finance Ministry Mariano Browne.
"We're not at that stage," Browne told the Express in an interview yesterday, insisting the turmoil in the international markets was really reflective of "short-term volatility".
Oil prices have been on a steady decline since they reached a record average of US$147.27 per barrel in July and when the Budget was passed in the Senate on Thursday, the average after market trading oil price had reached just below US$85 per barrel.
In a statement issued yesterday, however, Browne said "a budget is a statement of objectives and goals which are always subject to change should the circumstances warrant a change".
"The mid-term review which is presented to Parliament recognises this. Accordingly, we cannot respond to hourly or weekly changes nor adjust our objectives with each price change," he said.
Nonetheless, Browne said the Government "will continue to monitor the situation".
Yesterday, oil prices reached a one-year low average of close to US$77 and according to the United Kingdom's Guardian newspaper, the price of Brent crude oil dipped by US$3.58 to US$78.36 a barrel amidst the ongoing turmoil in the international financial markets.
The Trinidad and Tobago Manufacturers Association (TTMA), in a statement issued yesterday afternoon, reflected the concerns of many in this country as it noted "with some measure of concern, the rapidly decreasing price of oil on the international market: particularly in the context of a national Budget that was formulated at an estimated oil price of US$70 per barrel".
Browne said that the Government did not miscalculate the oil price for the Budget as the existing turmoil in the international markets did not exist when it was being drafted earlier this year.
Browne highlighted the fact that this country earns most of its revenue from Liquefied Natural Gas (LNG) which saw average prices in July of close to US$10.
The 2008/2009 Budget is also based on a natural gas price of US$4 per barrel but even this high-demand product has seen a drop in price since July.
The price of natural gas for November delivery in the United States (for winter) yesterday, dipped slightly to US$6.28 per 1,000 cubic feet.