Bajan PM issues oil warning

Published: Thursday June 12, 2008

Barbadian Prime Minister David Thompson warned yesterday that higher oil prices could spell doom for Caribbean islands.

"We cannot ignore the fact that oil represents a significant portion of the import bill of Caribbean oil importing countries and as prices continue to increase, more and more of the economic wealth of these countries will be shifted to the oil producing countries," he said.

He said if the trend continues, its likely that the balance of payments position of most of the affected economies will be pushed further into an adverse position.

Thompson made the comments during his opening address, 'Meeting the rising cost of living' at the launch of the 2008 Euromoney Latin Finance conference at the Hyatt Regency Trinidad hotel, 1 Dock Road, Port-of-Spain, yesterday.

Caribbean islands have tried to buffer the high oil prices by joining Venezuelan President Hugo Chavez’ PetroCaribe facility under which Venezuela supplies oil at preferred prices, deferring part of the payment.

Thompson called for Caricom to seriously consider implementing a common energy policy. He said Caricom countries remain heavily dependent upon petroleum as a primary source of energy.

"Four years ago, countries in the Caribbean region were consuming as much as 2.6 quadrillion British thermal units (BTUs) of total energy, with petroleum accounting for 77 per cent. This has increased dramatically.

"In 2007 alone, Barbados spent a total of about US$208 million on oil imports, representing some 7 per cent of gross domestic product (GDP) at factor cost. It is now being projected that Barbados' import bill for 2007 will be in the vicinity of US$275 million," he said.

He warned that the "devastating effect" that the trend can have on Caribbean oil importing countries should not be taken lightly.

"We only have to observe the negative impact that it is currently having on the cost of doing business in our respective countries," he said.


Source: Trinidad Guardian Newspapers
http://www.guardian.co.tt/business1.html