By Omar Anderson, Gleaner WriterFINANCE AND Planning Minister Dr. Omar Davies said last Thursday there was a need for the country to start serious talks regarding its energy bill, which he projected will reach nearly $1 billion soon if not contained.
According to Dr. Davies, if oil prices average US$33.40 per barrel for this year, this could lead to oil imports costing an additional US$69 million, which would move the current account deficit to US$950 million, which would be 10.6 per cent of gross domestic product (GDP).
Dr. Davies was addressing the House of Representatives during the opening of the 2004/2005 Budget debate at Gordon House.
"If there is one issue which could totally derail our balance of payment position in the medium term, it is the cost of imported energy," the Finance and Planning Minister said.
"While conservation measures must be promoted, the reality is that these will not be enough to address the difficulty which I have outlined."
Dr. Davies added that if the Organisation of Petroleum-Exporting Countries (OPEC) decides to reduce supplies and crude oil prices average US$35 a barrel for the fiscal year, the fuel bill could climb to more than US$950 million, which would be US$110 million above the original forecast. With that in mind, Dr. Davies said the country's current account deficit could move to 11 per cent of GDP.
Against this background, he called for serious national dialogue on the country's energy use.
"Neither tourism or bauxite or any other export sector can grow at a rate to compensate for the possible increases in our import bill," the Minister said.
He said the issue provides members of the House of Representatives the opportunity to work jointly on a realistic energy policy, which recognises the potential damage of a sharp price movement on every aspect of national life.
Meanwhile, as an immediate move to decrease the country's dependence on oil, Dr. Davies announced the removal of duties and General Consumption Tax (GCT) on imported solar water heaters manufactured within the Caribbean Community (CARICOM).
Solar water heaters made outside CARICOM will be exempt from GCT but will still attract the appropriate import duties.
