This was the declaration made by Finance Minister Colm Imbert following a recovery of oil prices above the US$30 mark this week.
However, despite this expression of relief Imbert said it is still too early to know whether T&T’s economic fortunes will improve as a result.
The national budget was originally based on an oil price of US$60.
However in the end of last month the West Texas Intermediate oil price fell to an unprecedented price of US $0.01 per barrel.
Brent oil, which is closer in price to our local crude than WTI, dropped to US $20.
Based on this drastic fall in the oil price Imbert told the Parliament on April 27 that our latest revenue projections are based on conservative prices of US$25 per barrel for oil for the rest of the year and US$1.80 per mmbtu for natural gas.
The budget’s fiscal deficit was originally estimated at $5.3 billion and was expected to expand to $15.5 billion, $10.2 billion higher than envisaged.
“In calculating this revised deficit, we have taken note of the fact that the collapse of the price of WTI oil to US 1 cent per barrel last week is having an adverse effect on other oil prices.
“For example, Brent oil, which is closer in price to our local crude than WTI, has dropped to $20. Such low prices were previously undreamt of.”
Imbert said a loss of revenue in fiscal 2020 of was now estimated at $9.2 billion, and in addition to that another $1 billion in extraordinary expenditure needed to be added.
Within that $9.2 billion revenue loss, we estimate a loss of $3.8 billion in taxes on incomes and profits, and losses of $750 million in business levy and green fund levy, $600 million in taxes on goods and services and international trade, $2.5 billion loss in royalties and production sharing and $1.2 billion loss in profits from state enterprises, among other areas,” Imbert said.
But what does the rise in oil prices mean for us now?
Well, according to Imbert it’s too soon to tell.