Geisha Kow­lessar-Alon­zo

geisha.kow­lessar@guardian.co.tt

Ex­pect fur­ther de­clines in nat­ur­al gas pro­duc­tion this year and the coun­try is run­ning out of fis­cal space are the ob­ser­va­tions of one econ­o­mist and a for­mer En­er­gy Min­is­ter.

For­mer en­er­gy min­is­ter Kevin Ram­nar­ine said the coun­try’s nat­ur­al gas pro­duc­tion is ex­pect­ed to fur­ther de­cline in 2021.

Ram­nar­ine’s com­ments came af­ter Fi­nance Min­is­ter Colm Im­bert re­vealed that the coun­try’s econ­o­my is in per­il as a re­sult of a de­cline in oil and gas pro­duc­tion and low in­ter­na­tion­al com­mod­i­ty prices.

In an in­ter­view with Guardian Me­dia Ram­nar­ine said the chal­lenges fac­ing nat­ur­al gas pro­duc­tion war­rants a na­tion­al dis­cus­sion.

He said: “Nat­ur­al gas pro­duc­tion in 2020 was 15 per cent low­er than it was in 2019 and that’s a sig­nif­i­cant drop in nat­ur­al gas pro­duc­tion. Main­ly we have seen sig­nif­i­cant de­clines com­ing from BPTT, the coun­try’s largest nat­ur­al gas pro­duc­er.”

Ac­cord­ing to Ram­nar­ine this de­cline is like­ly to con­tin­ue in­to 2021 adding that the pro­duc­tion of nat­ur­al gas is at the heart of the coun­try’s econ­o­my.

On Wednes­day, Fi­nance Min­is­ter Colm Im­bert said tax­es from oil com­pa­nies were down by $268 mil­lion or a whop­ping 39.7 per­cent. This he said was a di­rect re­sult of de­pressed prices for oil and gas, and low­er than ex­pect­ed pro­duc­tion vol­umes.

Im­bert not­ed that non-tax rev­enue which in­cludes a large com­po­nent of Roy­al­ties on oil and gas was al­so sig­nif­i­cant­ly down.

“We were ex­pect­ing to get $2.7 bil­lion from non tax rev­enue which is pri­mar­i­ly roy­al­ties and as you can see we are down to a lit­tle be­low $2 bil­lion. Roy­al­ties on oil and gas were down by $800 mil­lion or 40 per cent and that is as a re­sult of de­pressed oil and gas prices and low­er than ex­pect­ed pe­tro­le­um vol­umes.”

He al­so ex­pect­ed gov­ern­ment to re­ceive ex­tra-or­di­nary re­ceipts from oil and gas com­pa­nies aris­ing from the ne­go­ti­a­tions that “the ho­n­ourable Prime Min­is­ter did with Shell, BP and those com­pa­nies when he trav­elled around the world to var­i­ous head­quar­ters.”

Im­bert said: “We ex­pect­ed to get ex­tra-or­di­nary re­ceipts from those com­pa­nies of about $100 mil­lion and that’s down by 98 per cent be­cause its based on prof­its in the oil and gas sec­tor.”

Mean­while econ­o­mist Dr Vaalmi­ki Ar­joon said T&T’s debt lev­els are es­ca­lat­ing while rev­enues con­tin­ue to de­cline, an un­healthy sign for the econ­o­my.

“We are not just in a COVID pan­dem­ic. We have al­so found our­selves in a debt pan­dem­ic. We still have to re­pay this debt. It is all well and good to say oth­er coun­tries are bor­row­ing and like them we can’t es­cape it but we have to have a con­cert­ed plan,” Ar­joon told Guardian Me­dia.

He said Gov­ern­ment must im­ple­ment ways to in­crease rev­enue in a mean­ing­ful way.

Dr Ar­joon not­ed that con­tin­u­ous­ly dip­ping in­to the Her­itage and Sta­bil­i­sa­tion Fund was al­so un­wise es­pe­cial­ly for fu­ture gen­er­a­tions.

“How much mon­ey are we leav­ing our fu­ture gen­er­a­tion with if you’re us­ing the HFS and at the same time leav­ing them with the re­spon­si­bil­i­ty of hav­ing to pay out more and more debt?” Dr Ar­joon asked.

Dr Ar­joon agreed with the Fi­nance Min­is­ter that the coun­try’s re­liance on debt to pay salaries is un­sus­tain­able.

He said: “If you don’t have the rev­enue to pay them then many of them will start fac­ing cuts in salaries and some of them un­for­tu­nate­ly will start fac­ing loss­es in their jobs.”

The econ­o­mist added that Gov­ern­ment needs to fun­da­men­tal­ly ad­dress the cur­rent chal­lenges as putting a bandaid on it will not work.