Jun 2009 Financial News

Browne: Energy prices rising

Jun 03, 2009

There has been a rise in energy prices which has given the economy confidence, said Trade Minister Mariano Browne. “At this stage, the market suggests that we are starting to see a bit of an upturn starting. I am not saying that that we are over the worst by any stretch of the imagination. I am simply saying that we are seeing evidence and this is the recovery of oil prices and the recovery of gas prices.” The rise in the price of oil has not been great as the price of gas, which is important to the T&T economy, he said.

“The answer is someone is buying a lot of oil, but oil is much more easily stored than gas, so the price of oil has shown an increase while the price of gas hasn’t shown as much.” “The price of gas is more important to us from a revenue perspective, so that our revenues are stabilised. So we should be able to meet our revised budget forecasts very comfortably and maintain our position in the domestic markets,” Browne said. He was speaking yesterday at a panel discussion held by the T&T Manufacturers’ Association (TTMA) and the ANSA Merchant Bank at the Crowne Plaza Hotel, Port-of-Spain.

Browne said when the downturn first started to emerge six months ago, it was felt that T&T would not know how long the situation would last. “Happily, we are beginning to see some signs that although the numbers for the first quarter indicate there would be continued decline in other markets, the numbers also suggest that there have been some changing, some movement, that would suggest our position has begun to change,” Browne said. He said Government had expected this recession to last longer than others.

“The median times for recessions within the last ten years is about ten months or 12 months, and we had expected this one to last a little longer if only if it had been caused by financial conditions which were started in North America and exported by the finance variables across the world. It demonstrates the fact that all markets are globally connected,” Browne said.

To suggest that a rise in energy prices gives the economy confidence is the same as suggesting that as soon as the West Indies win one series it gives the cricketers confidence. As the last series against England has shown that is far from true. Energy prices are still very volatile and to make such comments makes you wonder if they were designed for the government to continue its uncontrollable spending or if the Minister is simply ignorant. After all, here is a Minister talking about a recession that started in the US and affected financial conditions worldwide, saying, "it demonstrates the fact that all markets are globally connected.”

Is that a revelation?

Source: Trinidad Guardian
http://guardian.co.tt/business/business/2009/06/03/browne-energy-prices-rising
Article by: Raphael John-Lall
Date: 03-06-09