The Trinidad and Tobago (T&T) Extractive Industries Transparency Initiative (TTEITI) has projected that declining oil and gas revenues would negatively impact the country’s social programs in the leadup to 2033.
In a July 30 report titled ‘How Will the Decline in Energy Sector Revenue Affect Social Services?’, TTEITI called for dialogue on the outlook for thousands of citizens who rely on these services.
The report stressed that the volatility in extractive sector revenue necessitates a reflection on its effects on vulnerable groups such as the elderly, low-income households, the disabled, the sick, the unemployed, and university students. “Given the importance of social expenditure, which accounts for 41% of oil and gas revenue, exploring how a 20% decline in energy revenues impacts society or those in need is worth exploring,” it stated.
As part of its obligations under the 2023 EITI standard, TTEITI developed a model in collaboration with the EITI International Secretariat. This model used publicly available data from TTEITI’s summary data templates, Ministry of Finance budget documents, and Ministry of Energy and Energy Industries bulletins to project extractive revenue and its impact on social expenditure up to 2033, based on a 20% decline in oil and gas revenue.
TTEITI said social expenditure in Trinidad and Tobago averaged TT$6.5 billion in the 2011-2023 period, with the Senior Citizens Pension recording the highest expenditure. Thus far, 2022 recorded the highest expenditure to senior citizens pension over the last decade, while the largest overall social spend was recorded in 2020 at TT$7 billion.
However, over the projected period from 2023 to 2033, total social expenditure shows a declining trend. According to the model, spending on the Government’s Assistance for Tertiary Education (GATE) program is expected to rise to TT$422 million from TT$400 million in 2020. Similarly, the Public Assistance Grant exhibits an upward trend escalating from the required TT$356 million in 2022 to a projected TT$392 million by 2033. Contrastingly, the Senior Citizens Pension displays a declining pattern with projected expenditure decreasing from TT$4.3 billion in 2022 to TT$3.9 billion in 2033. The Disability Assistance Grant follows suit, experiencing a decrease from the actual figure of TT$620 million in 2022 to the projected expenditure of TT$577 million in 2023. TTEITI said these findings should prompt policy dialogue on rationalization of spending, especially as demographic trends point to the aging population increasing over the next 20 years.
The report also emphasized the need for discussions on future industries and government investment in equipping today’s students with the skills needed for them.
Prime Minister Dr. Keith Rowley had said in a 2022 address that T&T is heavily dependent on revenue from the energy sector. He said, “Without the earnings from [oil, gas and petrochemicals], our budgetary arrangements would be extremely challenging and dire.”
Energy Minister, Stuart Young, said earlier this year that the country has about 10 years of gas production left, based on less than 12 trillion cubic feet (tcf) of natural gas reserves.
Data from T&T’s Ministry of Energy and Energy Industries show that oil and condensate production decreased 32% from 2015 to 2023, and gas production decreased 33% in the same period. The government is banking on cross-border gas development deals with Venezuela to keep gas production buoyed in the coming years.
