Fuel bill nearly Doubles, food Bill also sees Major jump

By Marlon Madden

Barbados’ fuel import bill almost doubled to a whopping $1.122 billion last year, according to the latest Central Bank estimates.

At the same time, the food import bill rose by more than $160 million and Central Bank Governor Cleviston Haynes predicted it would remain high for some time to come.

The fuel import bill for 2022 was up from a provisional $685.8 million in 2021. A year prior, Barbados was estimated to have imported about $510 million in fuel, and in 2018 and 2019, it was estimated to be in the vicinity of just over $700 million.

Barbados’ food and beverage import bill reached $817 million in 2022, up from the estimated $653.6 million in 2021. The island typically spends just over $600 million on food imports annually.

Responding to questions from journalists on Wednesday during his economic review for 2022, Governor of the Central Bank Cleviston Haynes said the dramatic increase in the fuel bill was concerning.

“Clearly, if we are spending over a billion dollars that is a lot of foreign exchange we are giving up in the context of energy prices,” he said.

Haynes explained: “Once again, we are an importing economy, we produce very little oil and in order to produce the goods and services we need to import. You have to recognise that those numbers also include the fuel we make to service the aircraft that come here for example. Therefore, we have to look at the re-export and do some sort of netting, but the point is, how much we are spending on oil is a significant drain on our foreign exchange.”

The outgoing Central Bank Governor said the situation highlighted the need for the country to urgently transition to reliance on renewable energy.

“The transition to clean energy is important not only from a foreign exchange perspective but from an environmental perspective and the whole issue of climate change,” he said, adding that once Barbados was able to reduce fuel imports, overall competitiveness would be enhanced.

“Competitiveness is important to us and rather than spending so much on fuel we can become more competitive, and the sooner we can do it relative to other countries, gives you a leg up in a sense.

“So, I am concerned about the amount but it is a reflection really of the scale of the economy, and as the economy improves you will spend more on fuel until you can get your alternative energy systems in place, but also as prices increase that is the challenge we have to try and navigate,” Haynes added.

Barbados has set an ambitious goal of relying almost entirely on renewable forms of energy by 2030.

In relation to the food import bill,
Haynes told journalists this was also concerning, but he expressed very little hope of it being lowered significantly in any hurry, especially in the face of low agricultural production locally.

“We have a large food import bill. I don’t think we are going to get rid of it,” he declared.

“I think that we will always be importing but there is more that we can do locally so that the linkages between agriculture and tourism will help to reduce that food import bill over time, and it creates an opportunity and a living for persons.”

The Central Bank Governor added that the agriculture sector needs to be urgently developed, incorporating new technologies and science to increase local production.

marlonmadden@barbadostoday.bb