People shouldn’t get too excited about the news of oil prices increasing, says Opposition leader Kamla Persad-Bissessar.
She gave the warning at Monday’s UNC (United National Congress) Reports meeting at Hillview College in Tunapuna. This, after OPEC Plus members last Sunday announced oil output cuts from May until year-end. This caused oil prices to rise.
Persad-Bissessar warned against people thinking they may benefit since she said people will have to pay more for refined fuel.
“So don’t expect any ease or spreeing or bacchanal – no better days are coming under (Colm) Imbert and this Government.”
She said T&T’s oil production levels have also fallen and the country would have to import refined fuel. Therefore, when the price rises, “your cost of living will go up,” she said, noting part of the inflation in food prices is due to the removal of fuel subsidies.
On Monday, before the UNC meeting, the party’s deputy leader Jearlean John issued a media statement analysing the situation.
John said.”What we’re witnessing is a geopolitical game where the crude oil market is merely the playing field.
“The latest move by OPEC nations and their allies to slash output comes in the wake of the banking crisis in the North Atlantic, primarily in the USA. This current banking crisis has occurred as the US Fed tries to mitigate against inflation by raising fed funds rates to approach five per cent.”
“The problem, however, is that should the crude prices return to the highs of over US$100 per barrel of 2022, it would represent a risk for OPEC causing inflation to accelerate.”
John added, “OPEC is concerned about declining global demand and the downward pressure on crude prices. Therefore, they’re walking a tightrope by settling on an optimum production cut to result in prices not rising too much above a floor of US$80 per barrel for benchmark crudes. All the while, they have a vested interest in not contributing to global inflation, which would sour economic growth prospects.”
“What does this mean for TT? Firstly, the inflation problem doesn’t appear to be going away anytime soon given these global machinations. In the near term, the government can expect to earn higher oil revenue.
“Unfortunately, because we’re now importers of refined fuel, the higher oil prices will mean prices at the pump may be held high by the Government. “
“This is despite Government’s promise to apply a sliding scale to adjust the price at the pump as the benchmark price for T&T’s crude changes. The Prime Minister made this promise in the 2023 Budget debate- one more promise he’s failed to deliver on.”
“The problems being faced with high and rising prices for food and other consumables can be expected to persist. This means it’s incumbent on the Government now more than ever to institute measures to bring relief to citizens.”
As a result, John called on Government to:
• Remove VAT on the 7000 basic food items that were VAT-exempt under the UNC government.
• Because of high/rising prices of essential family needs and because inflation, as measured by the CSO, is 8.3 per cent and because food price inflation is 17.3 per cent, now isn’t the time to raise electricity rates on families.
• Re-introduce the market bags for families in need as families come daily to UNC constituency offices, seeking help.
“If this PNM government doesn’t want to help the people, call elections now, the UNC’s ready to serve,” John added.