Movement for Social Justice (MSJ) leader David Abdulah is calling on Energy Minister Kevin Ramnarine to be honest about the implications the decline in the price of oil will have to the economy. Warning that the decline could have a ripple effect, Abdulah said it could have “a huge implication” for the economy.
He was speaking at a news conference at the MSJ’s headquarters in San Fernando about the minister’s statement in Parliament on Friday that the sale of natural gas was offsetting the loss of oil revenue. “If the energy sector was to collapse, then government itself will not have the revenue to spend and therefore, Government’s contribution to GDP, our national income will decline.
“All other individuals, businesses and so on that depend on the energy sector providing services they will also be affected, and therefore the services sector will also decline very significantly if the energy sector goes into decline and we cannot therefore mess about with our energy sector.” With a decrease in revenue, he said Government in order to meet its recurrent and capital expenditure would have to borrow more money, putting the country in further debt.
Abdulah predicted that the foreign exchange issue in the country would get worse. “If the oil prices are higher then there will be more money flowing into the country in terms of foreign exchange, lower oil prices means lower foreign exchange.”
Other prices would fall, he said, adding: “In the past where natural gas prices has fallen, product prices has fallen with it and so while there may be a lag of falling oil prices and the falling of gas and other commodity prices, it is quite possible that we could see a fall in those prices as well.” Despite this situation, he said he did not think the Government would reduce its expenditure, especially since the general election was close.
Abdulah also warned employers about retrenching workers.
