Movement for Social Justice leader David Abdulah believes fuel prices will increase and the TT dollar will be devalued soon if Government continues on its path to shut down Petrotrin.
Speaking on the October 1 budget at a press conference at his San Fernando office yesterday, Abdulah said the upcoming deficit budget will bring hardship on the people of T&T. Based on current policies, Abdulah said it seems Government is intent on setting up mega projects which will swallow huge amounts of foreign exchange, exacerbating the current foreign exchange crisis facing T&T.
“We expect to have a budget in which the Minister of Finance will allocate out of the Public Sector Investment Programme to fenceline communities of South Trinidad, to mitigate the effects of the closure of the refinery and the impact on 3,500 workers and their families,” Abdulah said.
“We expect to see fuel prices increase and bring greater hardship to the people, as transportation costs will set to rise again.
“We do not expect to see serious initiatives with agriculture or increasing the output of local manufacturing, or anything else that will generate sustainable economic activity in T&T.”
Saying mega projects such as the drydocking facilities in La Brea will not bring sustainable development, he said: “There is also a lack of transparency with two major hotels in Tobago. The seabridge has collapsed with only the Spirit in operation as the Cabo Star is down for drydocking and the Galleons Passage is not in operation.”
Regarding devaluation, Abdulah said the system is not one where Government can make a decision to devalue the currency.
“We have a floating arrangement in which the Central Bank injects a large quantity of US in the market to keep the supply of US dollars in sync with demand, so the price will not change. That is why the dollar has not moved,” Abdulah said.
However, he said the Central Bank will have difficulty in making these injections once Petrotrin is closed.
“Given the fact that foreign exchange reserves have been declining over the past few years because the Central Bank is using reserves, we are in trouble.
“Given the rate of decline of foreign exchange reserves, in two years’ time we will be in a difficult, place,” he said.
He said the importation of fuel will also use up valuable foreign exchange.
“Government says it will offset this with the sale of fuel in Trinmar but we have done our calculations and we have found that importation of 28,000 barrels of day of fuel at an average price of $85 exceeds what we will get if we sell 40,000 barrels of oil per day,” he explained, noting that T&T crude was not the best quality and will not fetch a high price.