Imbert delivers critical 2021 Budget

Trinidad and Tobago’s bracing for a possible gas price hike.

That’s what some people are doing since there’s been no assurance from Government that there won’t be any hike in the price of diesel and super gasoline in this afternoon’s Budget 2021 announcements.

Finance Minister Colm Imbert will deliver his 2020/2021 prescription for T&T at 1.30 pm at Parliament.

The 2019/2020 Budget’s theme was “Stability, Strength, Growth.” But after the “lost” economic year of 2020 following energy price shocks and COVID-19 costs, the 2020/21 Budget is expected to focus on re-engineering the economy to move on from COVID. It will also underscore leaving no one behind – something Government keeps stressing.

The Budget comes as T&T’s active COVID cases from the second wave stood at 1,839 last evening with 81 deaths so far.

At last week’s Budget forum on T&T’s financial circumstances, Imbert projected 2021 Budget expenditure of $52 billion and projected revenue of about $40 billion. These are decreased figures from the 2019/2020 Budget of $53b and projected $47b in revenue with a $5b deficit. However, subsequent energy price and COVID problems left T&T in a $15b deficit hole, Government said.

The last Budget was pegged on an oil price of US$60 per barrel and gas price of US$3/MMBTU. Yesterday’s oil price was US$39-$41 and gas price just over US$2.

Imbert and Prime Minister Dr Keith Rowley said last week that “hard” and “difficult decisions” have to be made ahead and things which were once postponed can’t be any further. Rowley said much of what Government has been doing cannot be sustained as before – Government would have to cut to suit its cloth and may have to give up some responsibilities.

Sources yesterday said Government’s fight to balance revenue and expenditure for 2021 has attempted to have a mixture of “good” with the “bad” in the Budget. They said since no devaluation will be done – which Imbert confirmed – subsidies and transfers to state enterprises are among the few things Government can adjust to cut costs.

Over the last term, Imbert indicated intent to remove gasoline subsidies. As a result of removal, fuel prices were raised three times in 2016. It was also raised in the 2018/19 Budget. Then he’d raised the price of Super by $1 to $4.97 but left the price of diesel at $3.41. The latter was at a cost of $700m to the state. Imbert said he’d slowed de-regulation of fuel subsidies in order not to affect public transport and related items. There was no gas price hike in the Budget for the 2020 election year.

Last Saturday, sources said they were waiting to see if Imbert removes the last of the subsidies which would then increase prices of diesel and super gasoline. But sources said any price hike would be minimal. They, however, acknowledged gas price increases always drive the prices of other items upwards, since it will increase the price of transportation costs which has a trickle down effect to consumers.

After concerns by Government about carrying debts by T&TEC and WASA, sources also hinted the Budget may put citizens on notice that applications for rate increases for at least one utility may be made to the Regulated Industries Commission.

Preparations were being made by T&TEC and WASA in the last term regarding rate hikes status-wise. The T&T Guardian confirmed that TTEC’s business plan needed to apply for an increase was ready, save for finalising a gas price with the National Gas Company. WASA’s business plan was incomplete.

Yesterday, Government officials agreed any WASA rate hike would have to be considered in the context of its inefficiencies from leaks to rate collection deficiencies. A review of WASA being completed next month will help determine WASA’s state.

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