Oman fiscal surplus quadruples

A surge in crude prices allied with higher oil production to boost Oman’s fiscal surplus by nearly four times in the first half of 2012 despite a sharp increase in actual public expenditure, according to official data.

The actual surplus stood at RO1,606 million (Dh15.5 billion) in the first six months compared with RO386.6 million (Dh3.8 billion) in the first six months of 2011, showed the figures by the Omani Ministry of National Economy.

The surplus was mainly a result of a 30 per cent increase in oil export earnings to nearly RO5.27 billion from RO4.059 billion due to higher crude prices and growth in Oman’s oil production to nearly 902,100 barrels per day from 878,800 bpd.

The price of Oman’s crude soared to an average $114 a barrel from $98 in the same period and this boosted the country’s total actual revenue by about 35.4 per cent to RO7.37 billion from around RO5.44 billion.

Gas revenue, including LNG sales from the liquefaction plant in the southern port of Sur, shot up by 66.4 per cent to RO837.2 million from RO503.2 million.

Actual public expenditure swelled by nearly 46.2 per cent to about RO5.76 billion in from nearly RO3.94 billion, the report showed.

A breakdown showed current expenditure rocketed by nearly 47.2 per cent while capital spending declined by around 13.8 per cent, mainly in civil ministries development spending and civil ministries capital expenditure. Allocations for oil investment programmes grew by nearly 6.1 per cent in the same period.

The report showed the surge in current spending was mainly due to a massive increase of around 145 per cent in oil production expenditure to nearly RO245.8 million from RO100.1 million and about 76 per cent rise in defence spending to RO1.73 billion from RO975 million.

Oman, which is not an OPEC member, recorded a large fiscal surplus of RO864.8 million (Dh9.26 billion) in 2011 due to higher crude prices and output against an actual deficit of about RO48.8 million (Dh468 million) in 2010.

Oman had projected a shortfall of RO850 million when it announced its record 2011 budget early last year. But it massively revised up the gap to RO1,850 million after Sultan Qaboos approved new jobs and hefty pay rises for Omani government employees in response to demands during unrest in February 2011.

The Gulf country, which controls nearly five billions of proven oil reserves, expects to boost spending in its 2011-2015 development plan by a whopping 113 per cent as it expects high oil prices and is pursuing plans to boost crude output.

Announcing its 2012 budget, the government projected record high spending of RO10 billion and revenue at RO8.8 billion, leaving a shortfall of RO1.2 billion.

By Staff, September 02, 2012