CEO of the T&T Chamber of Industry and Commerce Catherine Kumar has called for more focus on efficiency of expenditure as the T&T economy continues to take a battering from falling oil prices.
Kumar spoke with reporters yesterday following a breakfast meeting on Promoting Transparency of Our Energy Revenues hosted in collaboration with the T&T Extract Industries Transparency Initiative (TTEITI) at the Chamber's Westmoorings headquarters. She said while the situation is not all gloom and doom, the country needs to be realistic about the price of oil.
"I think we should expect it go down further as other world situations happen, whether it be Iran or otherwise. I think we should gear up for that," she said.
Acknowledging the difficult task facing the Government of cutting expenditure, Kumar expressed the view that solutions need to be sought that are more creative than telling all ministries to reduce expenditure by seven per cent.
"We have to look at the efficiency of our expenditure, we have to look at productivity, because there can be a lot of savings if we improve the efficiency of our expenditure," she said.
Kumar said consumers will have "to face the reality that it may be awhile before we see prices go back up, even to the US$45 level."
"Therefore it can't be business as usual," she said
Stating lay-offs are not a first option for T&T Chamber members, Kumar said businesses are looking at other ways in which efficiency can be improved.
"That's the feedback we are getting from our members. Layoffs are going to be a last resort," she said, even as she warned that it could not be completely ruled out as businesses are monitoring what is happening in the market.
"If it reaches a point where sales are a half of what they were before and you really don't need all the distribution channels you had before, it could come to that," she said
Kumar confirmed that none of the Chamber's members have seen the need to lay-off workers, but said other trends are developing: "What you are seeing in some cases is where employees have left and are not necessarily replaced. You may find some of that happening."
Yesterday's meeting focused on the possible effect of falling oil prices on citizens, the subject of a panel discussion involving energy sector expert Dr Krishna Persad and Professor Rampersad Motilal of the Energy Institute at the University of T&T.
In trading yesterday, the price of West Texas Intermediate (WTI) crude, the benchmark for T&T's light sweet crudes, rose US$1.10, or 3.7 per cent, to close at US$31.45, after falling almost six per cent Monday. The other benchmark, Brent crude, rose US$1.30, or 4.3 per cent, to US$31.80 a barrel.
Prices increased after the Organisation of the Petroleum Exporting Countries (Opec) made renewed calls for rival producers to cut supply alongside its members. Russia, seen as key to any deal, has so far refused to co-operate. Iraqi Oil Minister Adel Abdel Mahdi said he saw "some flexibility" for a deal, an idea that has been repeatedly mooted and dismissed for more than a year.
Even as volatility continues in the global oil markets, T&T budget is still pegged on an oil price of US$45 a barrel.