Oman’s total subsidies will touch $7.27 billion this year, the International Monetary Fund (IMF) reports in a study.
This is against a subsidy estimate at $4.64 billion for 2015 in the state budget and an actual subsidy of $4.36 billion in 2014, which indicated a fall of 17.11 per cent over the previous year due to a plunge in oil prices, Times of Oman reports.
Oman will achieve a nominal gross domestic product (GDP) of $81.64 billion in 2015, with population of around 4 million, the IMF study noted.
The Oman government has been contemplating withdrawing fuel subsidies for the last few years, but no decision has been yet taken due to its far-reaching implications on the entire society. However, the Central Bank of Oman recently favoured a phased reduction in the government subsidy, according to the news agency.
It’s worth noting that energy consumption in the Sultanate has been growing steadily as the main driver of the growth in subsidies.
Oman’s government grants subsidies to producers of various essential items, including:
- petroleum products,
- housing loan interests,
- essential food items, including wheat flour,
- oil firms,
- housing banks,
- power producers,
- flour mills,
- and poultry feed manufacturers.
Times of Oman also noted the following:
Providing details of projected post-tax subsidies for various products and services, the IMF study said the subsidy on petroleum products, which constitutes 60.11 per cent, has reached $4.37 billion, while natural gas and electricity subsidies are estimated at $2.46 billion and $0.43 billion, respectively, for this year.
The IMF also noted that the Sultanate’s subsidy, as a per cent of GDP, is estimated at 8.9 per cent – 5.36 per cent in the case of petroleum, 3.02 per cent for natural gas and 0.53 per cent for electricity.
As far as the per capita subsidy is concerned, the IMF reported that the country’s total per capita subsidy is estimated at $1,718.97 – $1,034.52 for petroleum products, $582.32 for natural gas and $102.13 for electricity.
Oman, with its rich energy sector experience, has been active also on the geopolitical scene trying to tighten relations with both developed and emerging Asia nations.
In June Emerging Equity reported the following:
Indonesia’s Energy and Mineral Resources Minister Sudirman Said said that Omani investors may invest up to $7 billion in oil and gas projects in the country, the Jakarta Globe reports.
According to the report, the minister says that a number of investors from Oman have expressed interests in developing oil and gas tanks, a refinery, and a petrochemical plant in Indonesia.
Also in June Oman signed an investment agreement with Japan. The objective of the agreement is to reduce the barriers to trade and investment between the two nations and allow Japan to increase investment in the Middle Eastern economy.
Some basic information about Oman, courtesy of Wikipedia.
Oman, officially the Sultanate of Oman, is an Arab country in the southeastern coast of the Arabian Peninsula. Holding a strategically important position at the mouth of the Persian Gulf, the nation is bordered by the United Arab Emirates to the northwest, Saudi Arabia to the west, and Yemen to the southwest, and shares marine borders with Iran and Pakistan. The coast is formed by the Arabian Sea on the southeast and the Gulf of Oman on the northeast. The Madha and Musandam exclaves are surrounded by the UAE on their land borders, with the Strait of Hormuz and Gulf of Oman forming Musandam’s coastal boundaries.