BUSINESS MONDAY: Oil import bill on the rise

AFTER declines in recent years, Barbados’ oil import bill is back up in the air.

This increasingly high bill of more than $700 million last year was one of the challenges which continued to confront the Barbados economy in 2018.

The December 2018 press release issued by the Central Bank of Barbados, revealed that fuel imports rose by Bds$86 million last year, going from $626.2 million in 2017 to an estimated $712.2 million.

This hike can be attributed to higher than average international fuel prices during the year, the Central Bank release explained. “Prices were up by 19.9 per cent” in 2018 – averaging US$69.52 in 2018 – up from US$52.51 the year before.

Since the start of 2019, oil prices are up about 20 per cent as a result of the Organisation of the Petroleum Exporting Countries (OPEC) and other producers, such as Russia, cutting production in an effort to reduce a
global glut.

However, the cost of Barbados’ fuel imports still remains lower than peaks in 2012 when this number surpassed one billion Barbados dollars. Back then, the annual OPEC crude prices reached highs of US$110 internationally.

Domestic exports flat

In the area of domestic exports, the Central Bank noted that these were “flat, as the gains from exports of chemicals [up from $72.5 million to $80.5 million] and printed paper labels [up from $22.7 million to $26.6 million] were outstripped by declines in rum and sugar exports”.

Sugar inflows dropped dramatically from $13.5 million in 2017 to a paltry $0.4 million in 2018; while rum declined to $79.8 million from $83.9 million.

Construction was another sector which witnessed a falloff – 7 per cent – during the review period, following moderate growth in 2017. It fell noticeably from $473.0 million in 2017 to $440.3 million in 2018.

“This outturn reflected low levels of infrastructural development in the public and private sectors, evidenced by reduced quarrying, cement consumption and lower imports of other construction material,” the release explained.

“The road ahead remains challenging,” the Central Bank acknowledged, but added that “the commitment of Government and all Barbadians to continue the critical structural reforms will position the economy to overcome these hurdles and strengthen economic sustainability”. (LS)

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