Former Central Bank governor Winston Dookeran says that the only prudent oil price on which the 2009/2010 Budget should be based is US$50 per barrel.

He is also recommending that the budget be based on a Henry hub natural gas price of US$2 to US$2.50 per million British thermal units (mmbtu), in light of the record-low price at which the commodity has been trading internationally.

Finance Minister Karen Nunez-Tesheira is due to deliver the 2009/2010 Budget in the Parliament tomorrow afternoon, and Dookeran gave his recommendations in an interview with the Sunday Express yesterday after a media conference at the Normandie Hotel, St Ann’s, at which he outlined the party’s position that the Government’s previous budgets went from ’promise to predicament’.

’I suspect they will obviously use some prudent figures, but they intend to fill the gaps by borrowing, not only by the State but by the State-owned enterprises, as they had done with Petrotrin,’ Dookeran said.

He called on the Government to look at measures to deal with the cost of living as he noted that ’although there is a fall in the rate at which inflation is rising, the level of inflation is high in relation to the incomes of our people.’

’This budget should make the immediate removal of VAT from T&TEC bills for the households of our nation, to reduce the pain as little as it may be. It will be a signal of a caring society in hard times,’ Dookeran said.

The 2008/2009 Budget was originally based on an oil price of US$70 per barrel and a gas price of US$4 per mmbtu.

Those figures were adjusted twice since then and eventually, the Government decided on a US$45 per barrel oil price and a US$3.35 per mmbtu gas price.

While oil prices have rebounded from the lows of just below US$40 a barrel late last year to just around US$70 a barrel, Dookeran said that the Government should not be looking at the kind of price on which it based the 2008/2009 Budget.

He had told reporters yesterday that the Government had to review the budget for the existing fiscal year twice and brought its projected expenditure figure down to $42 billion.

’We expect the actual figure to be closer to $38 billion,’ Dookeran said.

He also called for the full disclosure of the Ryder Scott gas audit last week that showed the nation’s proven gas reserves were at a year low last year of 15.34 trillion cubic feet (tcf), even though there had been an increase in the probable and possible reserves.

In an interview with the Sunday Express on Friday, Energy Minister Conrad Enill said the reserves issue has no direct relation to the budget but noted that increasing exploration activity is a priority for the upcoming fiscal year as he made reference to the ongoing review of the energy tax regime.

’All the Government can do is to concentrate on creating the environment that allows us to have the best possible results in this (global economic) environment,’ Enill said.