Jagdeo downplays cost-of-living impact from 7th project
Apr 20, 2025
…says Exxon cannot comment on economic developments in Guyana
Kaieteur News- Vice President Bharrat Jagdeo has downplayed the findings of an Environmental Impact Assessment (EIA) conducted by ExxonMobil for its seventh proposed Stabroek Block project, which indicates that the development can result in higher cost-of-living.
Vice President, Bharrat Jagdeo
According to the EIA, conducted by the company’s consultant, Environmental Resources Management (ERM), “With rising wages and increased purchasing power (driven not only by the Project but by broader economic growth and development trends), the Project could also contribute to increased costs-of-living (IDB 2023).”
The study goes on to explain, “This could manifest in several ways; for example, higher prices for in-demand goods and services, higher costs for housing in desirable areas of Georgetown, and/or higher costs for key goods in the supply chain (affecting both consumers and businesses/suppliers).”
In an invited comment, the VP told this newspaper during his weekly press engagement on Thursday that Exxon could not comment on the economic developments in Guyana.
The Chief policymaker for the Petroleum Sector stated, “No Environmental Impact Assessment for an Exxon project can comment on inflation at the national level because inflation is not determined by a particular project.”
He went on to explain that inflation is driven by a number of factors, including a larger budget deficit. “So, inflation comes about out of several things. There are different theories for inflation, it could be cost push inflation or you could have a demand-pull inflation, you could have the monetary approach to inflation that is when you have too much money in the system, basically a liberal monetary policy,” the former Finance Minister reasoned.
Consequently, Jagdeo told this newspaper, “ExxonMobil can’t do a study and speak about national inflation. I suspect, which Kaieteur News got wrong, they were talking about the next project, the cost may increase – their cost.”
The Vice President maintained that the oil company was referring to the increased cost associated with the Hammerhead project, as this is not unusual in the industry for large companies such as Exxon.
“I saw you elevated it to the cost-of-living in Guyana rather than their prices going up, which they like to increase. These companies love to increase cost because it comes on cost oil,” Jagdeo noted.
He believes that the increased cost for the company may be associated with higher rental fees being demanded by Guyanese for their homes, as this service can only be provided by citizens, as mandated in the Local Content Act.
When this newspaper quoted a section of the study to the VP which highlights that the project could cause rising cost-of-living, he maintained that this would be limited to Exxon.
“For them, Exxon, not for (Guyana), they can’t comment on that. How would their project know about this? So, they are talking about their cost. Every project has a cost…and that might be a justification to pay their workers more too, we got to watch that, so we have to look at these issues but I think y’all had it wrong.”
ExxonMobil in its EIA noted that Guyana’s inflation rate has risen above “historic levels in recent years” as experienced globally, although these levels subsequently settled below international and regional rates.
Inflation refers to the increase in average price of goods and services.
Further, the study pointed to the key roles of government in buffering the impacts from inflation. It states, “Additionally, the Government of Guyana implemented subsidies and price controls on targeted goods to help mitigate imported inflation. Measures such as cash grants, fuel subsidies, and support for the agricultural sector helped stabilize food and energy prices locally and further insulate Guyanese consumers from higher costs faced globally (Ministry of Finance 2023).”
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