Oman’s surplus soars 5 times

Higher oil prices and production boosted Oman’s fiscal surplus by nearly five times in the first seven months of 2012 despite a large increase in actual public expenditure, according to official data.

The actual surplus stood at RO2.041 million (Dh20.2 billion) in the first seven months compared with RO442.3 million (Dh4.4 billion) in the first seven months of 2011, showed the figures by the Omani Ministry of National Economy.

The surplus was mainly a result of a 34 per cent increase in oil export earnings to nearly RO6.37 billion from RO4.75 billion due to higher crude prices and a rise in Oman’s oil production to nearly 906,100 barrels per day from 878,100 bpd.

The price of Oman’s crude soared to an average $113.2 a barrel from about $100 in the same period and this boosted the country’s total actual revenue by about 38.4 per cent to RO8.7 billion from around RO6.3 billion.

Gas revenue, including LNG sales from the liquefaction plant in the southern port of Sur, rocketed by 65 per cent to RO985.3 million from RO597.1 million.

Actual public expenditure swelled by nearly 43.8 per cent to about RO6.7 billion in from nearly RO4.6 billion, the report showed.

A breakdown showed current expenditure shot up by nearly 44.1 per cent while capital spending declined by around 14 per cent, mainly in civil ministries development spending and civil ministries capital expenditure. Allocations for oil sector investment grew by nearly 6.4 per cent in the same period.

The report showed the surge in current spending was mainly due to a massive increase of around 61.4 per cent in oil production expenditure to nearly RO192.2 million from RO119.1 million and about 71 per cent rise in defence spending to RO2.05 billion from RO1.3 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 and 25 trillion cubic feet of natural gas, expects to boost spending in its 2011-2015 development plan by a whopping 113 per cent as it assumes high oil prices and is pursuing plans to boost crude output.

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

By Staff, October 09, 2012