Oman fiscal deficit in first 5 months

Oman recorded a fiscal deficit in the first five months of 2013 due to a sharp increase in expenditure although the Gulf country reported a massive surplus in the first four months, according to official data.

The monthly report by the Ministry of National Economy showed the budget recorded a shortfall of around RO110.4 million (Dh1.06 billion) during January-May despite a large rise in the country’s oil production.

The deficit followed a surplus of around RO1,033 million (Dh10.2 billion) in the first four months of this year while there was a surplus of RO1,580.5 million (Dh15.2 billion) in the first five months of 2012.

The report showed the deficit in the first five months of 2013 was caused by surge in spending with the addition of RO1,435 million (Dh13.77 billion) in “actual expenditure under settlement.” This brought the total spending in the first five months to RO6,1242.2 million (Dh58.8 billion).

Revenue declined slightly to around RO6,013.8 million (Dh57.7 billion) in the first five months of 2013 from RO6,104.5 million (Dh58.6 billion) in the same period of 2012 after the price of Oman’s crude fell to an average $107.3 from $113.5.

Revenue declined despite a large rise in Oman’s crude output to an average 929,000 barrels per day from 897,700 bpd in the same period.

The report showed oil export earnings edged down to around RO4,452 million from RO4,470 million while gas revenue slumped by nearly 22 per cent to RO605.9 million from RO772.8 million.

Oman reported its highest fiscal surplus of RO3,222 million (Dh31 billion) in 2012 following an increase in crude prices to their highest annual average. The budget recorded an actual deficit of RO113.2 million (Dh1.09 billion) in 2011.

The surplus last year was mainly a result of a 33.8 per cent increase in oil export earnings to nearly RO10.43 billion from RO7.79 billion due to higher prices and growth in Oman’s oil production to 918,000 bpd from 884,000 bpd.

The price of Oman’s crude rose to an average $109.6 a barrel from $102.9 in the same period and this boosted the country’s total actual revenue by about 31.6 per cent to RO13.98 billion from around RO10.62 billion.

Oman, 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 forecasts high oil prices and is pursuing plans to boost crude output.

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