Abstract. The oil price boom has undermined efforts to diversify the Trinidad-Tobago economy, and the wide fluctuations in oil prices have wreaked havoc with Government finances. Manufacturing has declined in relative importance and the economy is once more overly dependent on the petroleum sector. The abrupt fall in oil prices in 2015 substantially increased the fiscal deficit, and brought on chronic shortages of foreign exchange. The recent closure of the Petrotrin refinery reduces immediate growth prospects, but it alleviates Government's financing problem by eliminating the large subsidy to Petrotrin. Further fiscal tightening is needed to restore balance to the foreign exchange market; Government funding and fiscal incentives should be used to stimulate socially and commercially productive investment.