In the aftermath of the recent spike in world oil prices to $150.00 per barrel and the slide to less than USD80.00 in recent days, it has triggered a fusillade of commentary from Leader of the Opposition Mia Mottley. Prime Minister David Thompson has been curtly responsive to the cry from the Opposition leader by explaining that his government’s philosophy is one which frowns on borrowing to pay-down debt for energy consumption.
The issue here is whether government should immediately pass-on the benefit of a lowering oil price to Barbadians: Leader of the Opposition says yes because energy is a key input to the production organs in the economy and price movement has a ubiquitous impact on the cost of living of ALL Barbadians. Prime Minister David Thompson says no because his government is fundamentally against borrowing to pay for energy consumption, added to the equation is the debt currently on the books of BNOC as a result of the heavy subsidization of oil imports by the previous government and the current threshold subsidized prizce which the government has in place.
The BU family can correct us if we are wrong but the debt to be paid down we estimate to be close $180 million dollars.
The current situation which the Barbados government finds itself is an unenviable one. As we survey the behaviours of Barbadians in the post-$150 per barrel period, we have not detected any serious and significant attempt to engage energy efficient habits. The harsh reality given the current state of events which affect fossil fuel production, a return to a high oil price cycle will return sooner than later. In case you have forgotten, we have the issue of the speculators in the financial markets who at the drop of a hat may speculate as to the future price of oil based on what some believe are disingenuous factors. There is the increasing demand from emerging economic powers like China and India, we cannot forget the peak-oil theory which suggests that drilling for oil in the future will become a more expensive proposition, we can list other factors. Perhaps the biggest factor which we prefer to isolate is the geo-political factors which make the prediction of a stable oil price very difficult. Most of the world’s oil is located in the Arab world. The perennial tensions which have affected East West relations are well documented.
The discovery of Information and Computer Technology (ICT) has impacted mankind both in business and leisure endeavours in all ways we have to function in our existence. The visionaries among us now say that it is Energy Technology (ET) that will sustain man’s quest to more efficiently sustain our existence on the planet. Prime Minister David Thompson has given as his reason for not heavily subsidizing energy consumption by Barbadians as the need to identify resources to invest in other sources of energy, which we have referred to as ET.
We support the government on this bold move which is visionary in our view. We regret that the Barbadian who has often been described as more educated has to be dragged kicking and screaming to appreciate the concept of removing our dependence on fossil fuel. It is the only way we can buffer the external shocks created by buying fossil fuels in a volatile market. It is interesting also that St. Kitts, Nevis, Dominica to name some of our smaller and “so called” less developed neighbours have started down the road of ET.
In 2008 we have Leader of the Opposition building her case on a model which has served us well in the past, Prime Minister David Thompson not unlike US presidential candidate Barack Obama has determined that the time is now to go down a different road.
Where there is no vision the PEOPLE…
The blogmaster invites you to join the discussion.