A sharp increase in oil prices combined with higher crude production to boost Oman’s fiscal surplus by more than seven times in the first five months of 2012 despite a surge in public expenditure, according to official data.
The actual surplus stood at RO1,580.5 million (Dh15.2 billion) during January-May compared with RO184.4 million (Dh1.77 billion) in the first five months of 2011, showed the figures by the Omani Ministry of National Economy.
The surplus was mainly a result of a 33.1 per cent surge in oil export earnings to nearly RO4.47 billion from RO3.35 billion due to a sharp rise in crude prices and growth in Oman’s oil production to nearly 897,700 barrels per day from 879.400 bpd in the same period, the figures showed.
The price of Oman’s crude soared to an average $113.5 a barrel from $94.8 in the same period and this boosted the country’s total actual revenue by about 34.4 per cent to RO6.1 billion from around RO4.54 billion.
Gas revenue, including LNG sales from the liquefaction plant in the southern port of Sur, shot up by 81 per cent to RO772.8 million from RO425.8 million.
Actual public expenditure swelled by nearly 38.8 per cent to about RO4.52 billion in from nearly RO3.27 billion, the report showed.
A breakdown showed current expenditure rocketed by nearly 48 per cent while capital spending declined by around 14.9 per cent, mainly in civil ministries development spending and civil ministries capital expenditure. Allocations for oil investment programmes grew by nearly 5.5 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 expenditure on the oil sector to nearly RO218.8 million from RO89 million in the same period.
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.