Former energy minister warns of tough year ahead

Former energy minister Kevin Ramnarine anticipates a rough 18 months ahead for Trinidad and Tobago's economy, as natural gas production is expected to decline.

Speaking with Newsday on Wednesday afternoon, after Finance Minister Colm Imbert presented the country’s economic outlook for October 2020-January 2021, Ramnarine said the worst is yet to come, as natural-gas production was expected to be about 2.8 billion cubic feet per day for 2021.

He commented, “The economy was in recession prior to covid19, because (during) the period 2015-2020 the economy contracted by 16.2 per cent in real terms.

“In 2020, natural-gas production averaged at 3.1 billion cubic feet of gas per day, which compares to 3.8 billion cubic feet of natural gas per day in 2015.

"This is worrying, because 2021 is scheduled to be an even worse year for gas production.”

At a virtual press conference Imbert had said the period October 2020-January 2021 recorded a decline of $1.803 billion or 13 per cent less in estimated revenue and attributed this to the adverse effects of the pandemic.

Ramnarine said natural-gas production is the most important indicator of the health of the economy, and while there has been indication of a slow increase in prices, it does not help TT much.

“Our production is at a low, for both oil and gas, and that is what is mainly driving our revenue shortfall.

"Another challenge is also accessing US dollars, which is also directly related to the health of the energy sector.”

“Some recovery of the sector was expected for 2022, but it would not be sufficient to return the economy to its previous position.”

External borrowing and withdrawals from the Heritage and Stabilisation Fund (HSF), he said, were just about all the government can do.

“I do not know what other options the country has at this point in time. I do not see the Minister of Finance having many options other than borrowing. We really have to come up with innovative ways to manage the economy efficiently.”

Ramnarine recommended that government prioritise ease of doing business, diversification, public service reform and re-incentivising the energy sector and investments in renewables, as major players such as Shell and BP are changing their strategies.