The Mia Mottley administration cannot indefinitely shield consumers from high energy costs, Central Bank Governor Dr Kevin Greenidge has warned, urging businesses and households to reduce their reliance on fossil fuels.
At his third-quarter economic review, he told reporters: “When shocks happen, of course, the fiscal authority will step in like how the government has done with the pandemic, like how the government has done with the oil prices and provide support. But given the frequency of those shocks, behavioural change must happen. You can’t do it forever.”
Since the March Budget, the government has been hedging against world market prices, cushioning consumers from rising energy costs driven by the US-Israel-Iran war.
He said that while a “tremendous amount” of energy assistance had been provided through this year’s Budget proposals, such measures could not continue indefinitely.
Dr Greenidge told reporters: “I do not want to speak directly to fiscal policy. But you can’t continue because you don’t know…there is no end to when shocks will happen. We have been having so many shocks; shocks are the norm.
“So I think there must be a behavioural change. If you think about it, if oil prices continue to remain at the high levels, there is a limit to how much the government can intervene to support, because that takes away resources from other productive areas.”
He added: “What I think we need to do is, in this period, we as individual citizens have to change our behaviour… so, for example, we consume less electricity; we consume less fossil fuel; we change our practices. There has to be behavioural change.”
During the third-quarter review, he said the government, or any fiscal authority, could only provide support for so long.
Dr Greenidge then asked: “Where does it [the resources] come from? You either have to pull from resources that should be allocated to productive investment or you have to borrow to do it, then you will see it in the debt.
“So, we have to start to examine ourselves, both as businesses and individuals. How can we do better? How can we change our behaviour so that we are relying less on those things that we have no control over; we rely less on fossil fuels. We are electricity smart. So, we invest in solar panels; we invest in things that reduce our use of these things.”
He also suggested investing in technologies that improve business efficiency and consume less energy.
(EJ)
