Government used wrong reports for oil price predictions
George Murphy, the NDP MHA for St. John’s East, says government should have used all the information it had available to predict oil prices when determining the provincial budget.
He cites PIRA Energy Group as an example. In budget documents, government mentioned that it had consulted with PIRA to estimate an oil price for budgetary purposes.
“After extensive consultations, Government used the advice of PIRA to project revenues based on $105 U.S. a barrel,” Murphy said in the House of Assembly today.
“Will Government be using PIRA’s advice again in the coming budget year?”
Murphy cites a report from PIRA, issued in 2012, which contained a forecast that was nowhere near – was in fact almost half – the $105 projection used by government. The predicted price in that report was, in fact, closer to today’s reality.
“The PIRA report of 2012 warned of the possibility that prices could fall to US$58 for Brent Crude,” he said today.
“Why did Government ignore the warnings and go with the high-end scenario?”