Budget deficit of Oman grows to OMR4.9 billion

Muscat: Oman’s budget deficit increased by 21.4 per cent during January-November period of 2016, reaching OMR4,937.6 million, as plunging crude oil export revenues started affecting the government’s fiscal balance.
According to a preliminary estimate released by the government earlier, the budget deficit for the entire 2016 may touch OMR5.3 billion, a growth of 60 per cent over the budget proposal.
The substantial growth in deficit was due to two factors - a gap in the assumed average price of crude oil considered for revenue estimates and the actual price, and the fact that there was an increase in actual expenditure over budget estimates. Led by Saudi Arabia, all GCC countries are facing mounting deficit due to the plunging oil revenue.
However, as the oil price is showing a smart recovery, climbing up above $50 per barrel level so far this year, it is quite unlikely that the deficit will remain low.
The country’s net oil revenue for the January-November period of 2016 plunged by 38.4 per cent to OMR3,092.2 million from OMR5,021.5 million for the same period of the previous year. This was mainly due to a 28.9 per cent plunge in the average price of Oman Crude at $40.1 per barrel for the entire 2016, against $56.5 a barrel for the previous year. Revenue from natural gas showed a moderate fall of 0.6 per cent at OMR1,277.4 million during the first eleven months of 2016, compared to the same period of last year. In fact, the average price of Oman Crude at $40.1 per barrel was much lower than the budget estimate of $45 per barrel. The overall revenue of the government dipped by 22.2 per cent to OMR6,210.5 million for the January-November period of 2016.
The total crude oil production, including natural gas, of the country grew by 2.6 per cent to 367.56 million barrels for 2016, equivalent to an average of 1,004,300 barrels per day.