Oman Fiscal Surplus Surges in 2012 Opening 5 Months
By staff - Fri Jul 20, 4:15 pm
Fiscal Surplus For Oman Surges in 2012 Opening Five Months
As oil prices and oil production experience impressive gains, the fiscal surplus in Oman continues to grow, increasing seven times over during the opening five months of this year, even with higher levels of public spending.
According to the Ministry of National Economy in Oman, surplus totals reached Dh 15.2bn (or RO 1,580.5mn) from January to May of this year, much higher than the Dh 1.77bn (or RO 18.4mn) recorded in the same period of 2011.
Oil export revenues surged by 33.1 percent, moving from RO 3.35bn to RO 4.47bn and driven by rising crude prices and production increased. This increase boosted the fiscal surplus. Production rose from almost 879,400 barrels per day to 897,700 bpd.
Crude prices rose sharply, going from $94.8 to $113.5 per barrel, and boosting Oman’s total actual earnings by around 34.4 percent, or from about RO 4.54bn to RO 6.1bn.
Gas revenue also increased, moving from RO 425.8mn to RO 772.8mn, a jump of 81 percent. Gas revenues include LNG sales originating at the Sur liquefaction plant.
Actual public spending rose by almost 38.8 percent, from around RO 3.27bn to RO 4.52bn according to the report.
Detailed breakdowns indicated that current expenditures grew by almost 48 percent and capital spending fell by about 14.9 percent, mostly consisting of civil ministries development spending and capital expenditures. Oil investment programmes received almost 5.5 percent more allocations over the period.
Current levels of spending grew as a result of substantial increases in oil sector expenditures, which increased by about 145 percent, moving from RO 89mn to RO 218.8mn, according to the report.
Oman, not a member of OPEC, reported a RO 864.8mn fiscal surplus last year as a result of increased output and crude prices. This figure came after an actual deficit of around RO 48.8mn (or Dh 468mn) in 2010.
Early in 2011 Oman forecasted a RO 850mn shortfall during the announcement of the 2011 budget. Those figures were significantly revised, with the gap hitting RO 1,850mn once Sultan Qaboos approved massive salary increases and job creation for Omani public employees in response to regional unrest that occurred in February of last year.
Oman controls massive proven oil reserves, and forecasts a rise in spending over the course of 2011 to 2015. The nation’s development plan should increase by 113 percent, assuming high oil prices and supported by plans to increase crude output.
Record-high expenditures of RO 10bn were announced in the 2012 budget, with revenues at RO 8.8bn and resulting in a RO 1.2bn shortfall.