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Oman records large fiscal surplus in 2012

By Staff

Oman’s actual fiscal surplus rocketed to one of its highest levels in
2012 after the budget recorded a deficit in the previous year and official data showed the 2012 balance was a result of a massive rise in revenue.

The figures by the Omani Ministry of National Economy also showed the Gulf country appeared to be restraining expenditure, which ended the year almost equivalent to the actual spending through 2011.

The 2012 budget recorded an actual surplus of RO3,222 million (Dh31
billion) compared with 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 crude prices and growth in Oman’s oil production to
918,000 barrels per day from 884,000 bpd, the Omani Ministry of National Economy said in its latest monthly report.

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.

Gas revenue, including LNG sales from the liquefaction plant in the southern port of Sur, jumped by 33.3 per cent to RO1.56 billion from
RO1.17 billion.
Actual public expenditure edged up slightly by just 0.2 per cent to about RO10.758 billion from nearly RO10.737 billion, the report showed.
A breakdown showed current expenditure rose by just 2.7 per cent while capital spending declined by around 10 per cent, mainly in civil ministries development spending and civil ministries capital expenditure. Allocations for oil investment programmes grew by nearly
5.8 per cent in the same period.

The report showed the rise in current expenditure was mainly in defence and oil production spending which grew by around 16.6 and 5.8 per cent respectively. Current spending for civil ministries shrank by around nine per cent.

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.

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.

Quoted by the official Omani news agency, oil minister Mohammed bin Hamad Al Rumhy said the 2012 was based on a record high oil price of
$75 and crude output of 915,000 bpd, which he expected to be achieved last year.

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.