Friday 10 July, 2020

Imbert: T&T may lose $4.5B in revenue due to COVID-19

Finance Minister Colm Imbert said the country may suffer a drop in revenue of about $4.5 billion due to the economic fallout of the new coronavirus (COVID-19).

Speaking at a media briefing following a special Cabinet meeting on Monday, Imbert said based on the global fall in natural gas and oil prices, projections show a fall in the country’s revenue of around $4.5 billion which needs requires action.

“Our main source of revenue, natural gas…climbed up to 3.6 billion square feet and levelled off to about 3.55 billion square feet per day….this year, when we budgeted around $3.15 MMBtu and the actual price we’re receiving is around $1.70 and $1.80 per MMBtu. This represents a substantial drop in revenue.”

He said meanwhile, oil production dropped from around 80,000 barrels per day to around 50,000 barrels per day as of March 2020, while oil prices also dropped from around $64 in 2018 to around $30 as of March 2020.

“Between January of this year and today, the price of oil has cut by half.”

Imbert said the projected deficit is serious. 

“Based on our calculations so far in terms of what has happened to oil and gas prices, we expect to lose $4.5 billion. This takes no account of the slowdown in business activity and the natural decline in activity that will take place as a result of precautions that we are taking."

“If I take my best estimate…we will lose around $5 billion as a result of the oil price shock and the issues arising from precautions taken with respect to the virus."

Prime Minister Dr Keith Rowley said government will amend legislation to withdraw from the Heritage and Stabilisation Fund (HSF) to help cover expenses needed to combat the spread of COVID-19. 

He added that the Finance Minister has also received instructions to look at external funding to assist with the fight against the virus.

Imbert said CAF Development Bank of Latin America issued will be contributing approximately TT$3 million and is also making around TT$50 million in emergency funding available to its members. 

Government urged all citizens to refrain from all public gatherings and has banned all non-nationals from entering the country for the next 14 days. Nationals who arrive in the country will be placed under a 14-day quarantine. 

Government has also closed all public schools until April 20, 2020, and has closed all bars for 14 days. 

The public is being urged to avoid all crowded spaces as a matter of urgency, to prevent the spread of the virus. 

The measures are being taken after four people were diagnosed with COVID-19.

Chief Medical Officer Dr Roshan Parasram said all four were imported cases and contact tracing is being done for all patients, one of which was in critical condition. All four patients are improving, the Health Ministry said. 

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