Trinidad and Tobago’s Energy and Energy Industries Minister Franklin Khan revealed that the twin-island republic could lose between TT$6 billion and TT$8 billion due to the plunge in global oil prices.
“Oil and gas are cyclical. It goes up and it goes down,” Energy and Energy Industries Minister Franklin Khan reasoned.
“Now this down is a ridiculous down we must admit, but let’s hope that the upturn comes sooner rather than later. But I want to say that the upturn will depend largely on the developed countries’ economies getting back to a state of normalcy,” he added.
Speaking on the i955 FM Morning Show on Tuesday, Khan said that a few weeks ago the Finance Minister Colm Imbert had indicated that Trinidad and Tobago’s economy would suffer a loss of between six to eight billion dollars as a result of the drop in oil prices. As a result, the country would now have to await the finance minister’s new projection based on Monday’s market prices.
Oil prices have weakened sharply because of a combination of oversupply and a collapse in global demand due to the decline in economic activity caused by coronavirus (COVID-19) lockdown measures.
However, Khan told listeners that low oil prices would affect Trinidad and Tobago in a different manner from other countries.
“[We] are price seekers; we do not impact on the market, we do not impact on prices but we can adjust our operations in the best way we can [to see] if we can ride…this period.”— Trinidad and Tobago’s Energy and Energy Industries Minister Franklin Khan
He pointed out that “each country has its own idea” as to how to handle low oil prices, but Trinidad and Tobago would just have to “look and monitor the situation”.
Khan also reminded listeners that Trinidad and Tobago “are price seekers; we do not impact on the market, we do not impact on prices but we can adjust our operations in the best way we can [to see] if we can ride…this period”.
“We should be concerned but we shouldn’t panic. Panic is not a good state of mind to be in. There are a lot of areas for concern, there are a lot of areas we have to dig deep in our psyche to understand and to come to terms with (and) I think the government has been handling the situation well,” Khan said.
According to Chief Executive Officer of the Trinidad and Tobago Energy Chamber Dr Thackwray “Dax” Driver, the low-price period will not be too prolonged, but the country must adjust accordingly.
“…Trinidad and Tobago needs to plan for a low-price environment and have policy measures in place that reflect that scenario,” Driver told the Trinidad Guardian newspaper.
However, the CEO could not say how long low prices will continue. He instead noted that it largely depends on the length of health-related COVID-19 lockdowns in the major markets.
“Low oil and gas prices obviously have major implications for Trinidad and Tobago as we depend on these commodities for the majority of our export earnings, along with petrochemicals,” Driver stressed.
–With contributions from CMC