The price of West Texas crude has plunged 45 percent to the lowest level in decades, with the price hitting US$10.85.
Imports of fuel fell in 2016
On Thursday, the price dipped to close on the world market at US$19.73 from over US$62 in December last year. The fall takes place even as major oil producers agreed to cut production by nearly 10 million barrels a day, effective May.
The news is terrible for oil-producing countries but a tremendous gift to net importers of the commodity. In the Caribbean, Trinidad and Tobago and Guyana net exporters of the product will be negatively affected, net importers in the rest of the Caribbean will enjoy a windfall should the low price persist. Jamaica will find the plunge a great gift as it will play a huge role in offsetting the fall in revenues from the tourist trade as at the current price, the country would save around one billion per year.
For consumers, the drop means lower fuel prices, electricity charges, but the government will see less advalorem taxes on petrol collected.
Foreign exchange around US$40 million per month at the current price. It will ease consumers cost as prices of petrol and electricity fall, but government will collect less taxes from petrol and GCT from JPS bills.
