Keith Rowley says brace for oil price Hike – Trinidad & Tobago
Brace for higher fuel prices.
Prime Minister Dr Keith Rowley has put the population on notice that the Government cannot insulate it “completely” from the price hike which is currently affecting the oil industry.
Addressing a “Conversations with the Prime Minister” session at the Bon Air West community facility on Tuesday night, he said contrary to the assumptions of many in the population, the country stood to lose, not gain, from high oil prices because its production levels were too low.
The Prime Minister noted that the current oil price (as of Tuesday) was US$128 a barrel.
He said calculations done at the Ministry of Finance indicated that an oil price of US$110 would mean a Government subsidy of $2.9 billion, with the oil levy which goes towards paying the subsidy, being a mere $509 million.
If oil goes to US$125 a barrel, the estimated subsidy would be in the order of $4 billion, of which the contribution of the oil levy would be $600 million, he said.
The levy is meant to capture revenue from high oil prices, but the Prime Minister said in the early days the levy covered the cost of the subsidy, but the cost of the subsidy to the Treasury has way exceeded the contribution from the levy.
He said if the oil price goes to US$150, the Government’s liability, if it were to maintain gas prices at the existing levels, would be $4.48 billion. “The question is this: can we find that money to subsidise fuel, to insulate the population from this (hike)? That is the question we have to answer because that money is not available,” he said.
The Prime Minister said if there is no subsidy on premium gas, and the price of oil is US$100 a barrel, the price at the pump would move from $5.75 to $7.58 per litre, which is over $2 more.
Super gas with no subsidy would go from the current price of $4.97 per litre to $7.46; and diesel from $3.51 to $6.58.
The Prime Minister said people currently don’t watch how they use their cars, and don’t think about the use of fuel when they enter slow-moving traffic because of the price levels.
BRACE FOR GAS HIKE Trinidad & Tobago Express Newspapers
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