For the first time in 2021, on the back of increase in crude prices, the Sultanate of Oman has achieved surplus revenues of RO 154.1 million in August.
The surplus comes with the rise in oil prices, as the average price of Oman crude per barrel for August reached $71.7, bringing oil revenues to more than 83 per cent from RO 365 million in July to RO 670 million in August.
With this surplus revenue, the Sultanate of Oman’s budget deficit dropped to RO 1.051 billion in the first eight months of the current year from RO 1.957 billion during the corresponding period of 2020.
According to figures from the National Centre for Statistics and Information, total public spending, by the end of August, stood at RO 7.382 billion, which is 1.7 per cent less compared with RO 7.511 billion during the same period in 2020.
The total revenue during the eight month period from January to September registered a rise of 13.95 per cent thanks to the surge in oil and gas revenues. Total revenues rose to RO 6.330 billion during the period against RO 5.554 billion registered during the same period of 2020.
According to International Monetary Fund (IMF), the economy is set to recover in 2021, with non-hydrocarbon GDP growth of 1.5 per cent as vaccine roll-out gradually restores domestic activity along with the recovery of external demand.
In the beginning of this month, the Ministry of Finance revealed in its monthly bulletin that oil revenue amounted to RO 3.309 billion while gas revenue reached RO 1.231 billion during the period.
“Oil production is projected to increase after the current Opec+ agreement expires in April 2022”, the IMF said in a report.
Data from the NCSI shows that the Sultanate’s oil production reached 232,942,500 barrels till the end of August 2021, compared to 233,575,200 barrels till the end of August 2020.
Global rating agency Moody’s in its estimates in the second week of this month said that higher oil prices will account for around half of the expected reduction in the fiscal deficit to less than 2 per cent of GDP in 2021 from 18 per cent of GDP in 2020.
During the last one year, the Sultanate of Oman has adopted a number of fiscal measures to support the economy including interest-free emergency loans, tax and fee reductions and waivers, the flexibility to pay taxes in instalments and a Job Security Fund to support citizens who lost their jobs.
