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APNU warns: Cut borrowing for Budget 2026 as oil prices slide
…says another “largest budget” would be reckless gamble
(Kaieteur News) – The A Partnership for National Unity (APNU) is urging the Government of Guyana (GoG) to be mindful of how it contracts more loans to fund this year’s Budget amid falling oil prices, largely influenced by the abduction of Venezuelan President, Nicolas Maduro by President of the United States, Donald Trump.
The U.S. President not only captured the head of state, but took control of the country’s oil resources which he plans to use to cut oil prices to $50 per barrel.
As a petro-state, this has a grave impact on Guyana and the nation’s economy. Consequently, Terrence Campbell, a former member of the Natural Resource Fund (NRF) Investment Committee said he previously raised an alarm over the government’s spending of revenue garnered from the sector.
Finance Minister, Dr. Ashni Singh
Campbell pointed out that Guyana was projected to earn less revenue in 2025, compared to 2024, despite the startup of an additional Floating Production Storage and Offloading Vessel (FPSO) and the production of oil beyond the initial design rates of the ships.
Consequently, he said, “This alone should tell us that we have some problems. If we are to fall from the 60s down to 50 (per barrel of oil), it means that we will be earning much less revenue and the government would be wise, as you have suggested to reduce borrowing. There will be challenging times ahead and this is entirely the wrong government, a profligate government for us to have at a time when the economic road ahead, especially with energy looks challenging.”
The Member of Parliament (MP) said Guyana’s situation was particularly troubling due to the economy’s dependence on oil revenue. In fact, he noted that many of the other sectors, such as sugar and rice for instance are experiencing difficulties, with gold also suffering lower declarations. Notably, Campbell acknowledged the ongoing efforts by government to tackle illegal gold mining, which he believes is specifically being targeted to cushion the lower oil prices.
Given the prevailing circumstances, Campbell said it would be reckless for yet another “largest budget ever” to be presented to the House. “If he (the finance minister) comes to the Assembly and he opens up about the largest budget ever, I know that he is continuing on the reckless path that they have gone before and he is not taking note, he is not cognizant of the effects of a lower oil prices on Guyana’s economy and the budget,” he explained.
The MP made it clear that the government should restrain itself from increasing the country’s debt burden under such conditions. “In this scenario, borrowing should be restrained. We should not be looking in this scenario to be driving up our debt load,” he urged.
He said that while he does not believe the budget should be reduced, at the same time the fiscal plan should not be increased. Instead, he said, “I’m suggesting caution in the budget.”
Falling oil prices
During the presentation of Budget 2025, Finance Minister Dr. Ashni Singh explained that Guyana was expected to receive less revenue from the sector, despite higher production was anticipated. The minister noted that this was as a result of the decline in oil prices from the previous year.
He said it is anticipated that there will be 246 lifts of profit oil from the Stabroek Block in 2025. Within this, Government was projected to have 31 lifts of profit oil from three FPSOs that were in operation at the time and the One Guyana FPSO, commissioned in the second half of the year.
Be that as it may, Dr. Singh pointed out, “With the average price of Brent crude expected to decline to an average of US$71.9 per barrel, Government’s petroleum revenue deposits are projected to be 2.6 percent lower than in 2024. Government is projected to earn an estimated US$2.2 billion in profit oil and US$340.6 million in royalties.”
In 2024, an average 225.4 million barrels of crude oil was produced, with the sector recording 57.7% growth that year. With the price of oil averaging, US$80.7 per barrel in 2024, Guyana earned US$2.6B from oil production.
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