By: Kimberly Ramkhalawan
September 27, 2022
While it came as no surprise to many locals in Trinidad and Tobago, the price they face at the pumps this week, has officially moved up by a dollar as its government looks to remove the subsidy cap of $2B it has long enjoyed as an oil producing nation as part of its National Budget 2023.
Presenting the fiscal package titled ‘Tenacity and Stability in the Face of Global Challenges’, Finance Minister Colm Imbert
However, with the closure of state-run oil Refinery, Petrotrin, its production has decreased
Pegging the budget and price of fuel at US$95 per barrel for oil, the unsubsidised prices of premium and super gasoline and diesel per litre, before any mark-up, are as follows: Premium gasoline: $7.66 Super gasoline: $7.59 Diesel: $7.75
The minister shared Government if the current prices are left unchanged would be $1.9 billion, and that in the government’s firm view “that this level of expenditure on fuel is not productive, and that taxpayers’ money could be better spent elsewhere”. Justifying the move, the minister said currently Barbados, which was also an energy producing nation was paying over $13.60 per litre.
This fuel subsidy cap of $1B in this year’s budget is said to include the increase in the inter-island ferry ticket by $25.00, while the increase the cost of inter-island air travel for all tickets by $50.00. Nevertheless, he says the estimated increase in annual revenue for the Sea Bridge will be $30 million, which will still operate at a loss, and would be supported by a subsidy in the amount of $170 million a year, while the estimated increase in annual revenue to Caribbean Airlines for the operation of the Airbridge will be $50 million, which, with this increased price will still require subsidy of the Airbridge of over $50 million per year.
Meanwhile, this year’s budget is moving ahead with increasing the compulsory age of retirement from 60 to 65. The minister says currently “the National Insurance Fund in the context of the most recent actuarial reviews which have identified changing demographics as impacting negatively on the long-term sustainability of the Fund. Although the fund has sufficient money to last for the next 20 years if no changes are made, an increase in the compulsory age of retirement from 60 to 65 years is being advanced as one of the solutions for reversing the Fund’s declining viability. An increase in contribution rates is a last resort”.
He added that in Jamaica retirement age was already 65, while in Barbados it was at 67.
As a result of these assumptions, for Fiscal 2023, Total Revenue is estimated at $56.175 billion; Total Expenditure is estimated at $57.685 billion. Based on these assumptions and estimates the government is projecting out of its total revenue estimate of $56.175 billion for 2023, Oil revenue $25.019 billion, while Non-oil revenue expected to be $30.150 billion with Capital revenue put at $ 1.006 billion.
Imbert says if all goes to government’s plan, fiscal accounts in 2023 will be close to balance with a deficit of $1.510 billion or 0.8 percent of GDP.
As for allocation per ministry, Education and Training will receive the largest share of the pie at $7.453 billion, while Health is set to receive some $6.892 billion. To aid in tackling the country’s crime situation, National Security has been given $5.798 billion, while Social Grants received $5.453 billion. Other ministries outlined include some $3.748 billion set aside for Works and Transport, while its Public Utilities Ministry was allocated a sum of $2.823 billion. Despite it being a year for Local Government Elections, the Rural Development and Local Government Ministry received only $1.887 billion, food and Agriculture $1.330 billion, and Housing $0.974 billion.