GEISHA KOW­LESSAR-ALON­ZO

geisha.kow­lessar@guardian.co.tt

Prime Min­is­ter Dr Kei­th Row­ley has an­nounced that the gov­ern­ment will re­vis­it the en­er­gy sec­tor tax regime to en­sure the coun­try re­mains com­pet­i­tive.

Speak­ing dur­ing a vir­tu­al con­fer­ence host­ed yes­ter­day by the As­so­ci­a­tion of Amer­i­can Cham­bers of Com­merce in Latin Amer­i­ca and the Caribbean (AAC­CLA) themed, fore­cast for Latin Amer­i­ca and the Caribbean, Row­ley said, “We al­so in­tend to re­vis­it the fis­cal regime gov­ern­ing the pe­tro­le­um sec­tor to en­sure that Trinidad and To­ba­go re­mains an at­trac­tive in­vest­ment.”

A re­cent study by the IDB said T&T’s fis­cal regime for the en­er­gy sec­tor is one of the most un­com­pet­i­tive in the re­gion.

On­ly last Mon­day Fi­nance Min­is­ter Colm Im­bert an­nounced a change in the ap­pli­cati0n of the sup­ple­men­tal pe­tro­le­um tax so that oil com­pa­nies pro­duc­ing 2000 or few­er bar­rels of oil per day will not have to pay SPT un­less the price ex­ceeds US $75 a bar­rel. This mea­sure is ex­pect­ed to be in place un­til 2023.

He told busi­ness lead­ers that ac­tiv­i­ty in T&T’s en­er­gy sec­tor is ex­pect­ed to ramp up in 2022 with the com­ing on-stream of a few sig­nif­i­cant projects.

Row­ley said op­por­tu­ni­ties ex­ist for US en­er­gy ser­vices com­pa­nies to par­tic­i­pate, es­pe­cial­ly as this coun­try ven­tures fur­ther in­to the deep wa­ter.

In a wide rang­ing ad­dress Rol­wey said en­hanc­ing con­nec­tiv­i­ty in all its forms is al­so a nec­es­sary pre-req­ui­site to sup­port the up­com­ing re­nais­sance of the do­mes­tic en­er­gy sec­tor.

In Sep­tem­ber 2020, Row­ley not­ed, Caribbean Air­lines re­ceived ap­proval from the Unit­ed States De­part­ment of Trans­porta­tion to fly the Port-of-Spain/Hous­ton route.

He said while the on­go­ing COVID-19 pan­dem­ic may de­lay the pro­ject­ed com­mence­ment of flights, the ad­di­tion of the Hous­ton route is ex­pect­ed to bol­ster pro­duc­tiv­i­ty by pro­vid­ing a fast and re­li­able ser­vice to our en­er­gy sec­tor pro­fes­sion­als.

On the coun­try’s econ­o­my, Row­ley said be­fore COVID the bud­get deficit for 2020 was an­tic­i­pat­ed at $5.3 bil­lion or 3.4 per­cent of GDP.

He added with the col­lapse in oil and gas price and the ex­pen­di­ture as­so­ci­at­ed with the new pan­dem­ic this is now an­tic­i­pat­ed to be TT$16.8 bil­lion or around 11 per­cent of GDP for fis­cal 2020.

“The Cen­tral Bank’s En­er­gy Com­mod­i­ty Prices In­dex (ECPI), which is an in­di­ca­tor of the av­er­age prices of T&T’s en­er­gy ex­ports, de­clined 31.8 per cent (year-on-year) dur­ing the first sev­en months of 2020.

“The bench­mark West Texas In­ter­me­di­ate (WTI), that oil price fell 34.7 per cent (year-on-year) to an av­er­age of US$37.44 per bar­rel over the first sev­en months of the year while the Hen­ry Hub (HH) nat­ur­al gas price de­clined by 33.0 per cent (year-on-year) to av­er­age US$1.80 per mil­lion British Ther­mal Units (mmb­tu) over the same pe­ri­od,” Row­ley ex­plained.

He added the chal­lenges of the en­er­gy sec­tor had some im­por­tant im­pli­ca­tions in slow­ing the in­flows of for­eign cur­ren­cy in­to the do­mes­tic mar­ket.

Pur­chas­es or con­ver­sions of for­eign ex­change in the mar­ket fell sub­stan­tial­ly in the first eight months of the year, by some 18.2 per cent,

Row­ley said, adding that this re­sult­ed in some tight­ness in the for­eign ex­change mar­ket.