RIYADH: An increase in Oman’s net oil revenues drove a 2.3 percent year-on-year rise in public earnings, reaching 8.12 billion Omani rials ($21.07 billion) between January and the end of August, according to new figures.
The monthly bulletin issued by the Ministry of Finance said that net oil revenues reached an estimated 4.65 billion rials by the end of August, reflecting a 12 percent surge compared to the same period last year.
The growth in figures suggests vibrant and expanding economic activity, with more funds circulating within the country.
Oman’s public revenue saw an annual decline of 2 percent year on year in the second quarter, reaching $16.1 billion, the country’s news agency reported in August.
The sultanate’s economic landscape is heavily influenced by its reliance on oil and gas revenues, making it vulnerable to global price fluctuations.
The government has been actively working to diversify the economy and reduce dependence on hydrocarbons as part of its Vision 2040 plan.
The bulletin further showed that the average achieved oil price reached $83 per barrel, while the average oil production amounted to about 1.1 million barrels per day.
The increase in net oil revenues is attributed to the methodology used by the government-owned firm Energy Development Oman to collect crude earnings and manage cash liquidity.
Net gas revenues reached 1.43 billion rials, reflecting a 15 percent drop by the end of August compared to the corresponding period in 2023. This is due to the change in the methodology for collecting gas revenues.
Current earnings collected until the end of August also decreased by 104 million rials compared to the same period last year to reach about 2.23 billion rials.
The bulletin also revealed that public spending until the end of August amounted to 7.66 billion, an increase of 7 percent compared to actual expenditure during the same period of 2023.
The most prominent expense is the current civil ministry fees, which amounted to 5.43 billion rials, down by 30 million rials compared to the same period in 2023.
Development expenditures of ministries and civil units amounted to 735 million rials by the end of August, with a disbursement rate of 82 percent of the total development liquidity allocated for 2024, which amounted to 900 million rials.
Total contributions and other expenditures amounted to 1.44 billion rials, up by 58 percent year on year. This is primarily owed to the implementation of the social protection system this year.
Support for the social protection system, electricity sector, and petroleum products until the end of August amounted to about 373 million rials, 295 million rials, and 191 million rials, respectively, while the transfer to the debt repayment provision amounted to 266 million rials.
With regard to global and local economic performance, the bulletin explained that the Organization for Economic Co-operation and Development indicated in its interim outlook report issued in September that global growth is expected to stabilize at 3.2 percent in 2024 and 2025, in line with the average increase rate observed during the first half of this year.
The organization also suggested that the delayed impact of tightening monetary policy in the economies of advanced countries has begun to moderate, in addition to easing monetary policies and lower inflation that will support interest rates in 2025. It also disclosed that the inflation rate decline will provide additional support to the growth of real per capita income and private consumption in many economies.
Regarding global oil markets, the bulletin stated that according to the US Energy Information Administration’s Short-Term Energy Outlook report in September, the average price of Brent spot crude is expected to reach about $83 per barrel in 2024, while the average price of Brent spot crude is expected to reach $84 per barrel in 2025.
As for the local economy, S&P raised its credit rating for the Sultanate of Oman to “BBB-” with a stable outlook in its report issued in September, placing it in the first degrees of the investment worthiness index after seven years.
This is due to the continued measures to improve public finances through development initiatives and efforts in the financial and economic sectors and government restructuring. This contributed to restoring the monetary balance between revenues and public spending as intended in the medium-term plan.
This comes in addition to the government’s commitment to reducing the state’s public debt, managing government companies, and decreasing indebtedness.
The agency expected that Oman would achieve moderate financial surpluses of 1.9 percent during the period from 2024 to 2027, growth in real gross domestic product of about 2 percent annually, and record financial surpluses in the current balance of 1.2 percent of GDP.
