The Sultanate has registered a surplus in the State Budget of RO357mn for the first quarter of this year owing to conducive conditions in the oil and gas sector. This is a contrast compared to the RO751mn deficit in the same quarter in 2021.
In a statement by the Oman News Agency, it was revealed that the surplus will be utilised for accelerating economic recovery, enhancing development spending, and reducing the risks of the public debt portfolio.
At the end of the first quarter of 2022, public revenue amounted to RO3,025mn – which is up by 66.3 per cent when compared to the same quarter in 2021, according to the monthly bulletin issued by the Ministry of Finance.
This is mainly the result of an increase in the net oil revenue by 70.2 per cent at the end of Q1 2022 to reach RO1,565mn compared to the same period in 2021.
This was also complemented by an increase in the average oil prices to US$78 per barrel and higher average oil production to 1,025 thousand barrels per day, when compared with average oil prices of US$45 per barrel and average oil production of 952 thousand barrels per day over the same period in 2021.
At the end of Q1 2022, the gas revenues also increased to RO454mn, up by 124.4 per cent when compared to the same period in 2021. This was a result of higher gas prices and an increase in average gas production.
During the same period, current revenues increased by 23.7 per cent when compared to the same period in 2021. This increase was supported by VAT receipts of RO69mn, an excise tax of RO24mn, and an improved collection of government revenue.
By the end of the first quarter of 2022, public spending amounted to RO2,668mn, which was up by 3.8 per cent when compared to the same period in 2021.
Meanwhile, the expenditure of civil ministries and units registered almost similar figures to the same period in 2021, while public debt service registered an increase to RO291mn. The monthly bulletin also outlined that the development expenditure of civil ministries and units increased by 130.8 per cent to RO150mn compared to the same quarter in 2021. The total amount spent represents 13.6 per cent of the total development budget allocated for 2022 i.e. RO1,100mn.
Contributions and other expenses amounted to RO179mn, including RO50mn allocated for public debt service.
Following the decision issued in November 2021 to stabilise vehicle fuel prices to that of rates set in October 2021 as a maximum, the oil products subsidy amounted to RO67mn. The Government will continue to cover the difference resulting from excess oil prices up to the end of 2022, as per the report.
According to the MENA Economic Update released by the World Bank, Oman’s economy is projected to recover as measures against the COVID-19 pandemic continue to be lifted, and also due to increasing oil prices and production.
The gross domestic production (GDP) is projected to grow by 5.6 per cent supported by the growth of more than 8 per cent and 2 per cent in the oil and non-oil sectors, respectively, in 2022. However, the GDP growth is projected to decrease to 2.7 per cent on average in 2023 and 2024.
