Oman’s budget deficit for the first ten months of 2016 surged by 46.7 per cent to RO4.81bn, as plunging crude oil export revenues started affecting the government’s fiscal balance. This is against a projected deficit of RO3.3bn for the entire year and a deficit of RO3.26bn for January-October period of 2015, according to data released by the National Centre for Statistics and Information (NCSI).
Deficit for this year is expected to remain high primarily because the average crude oil price was low in the first half. Now it is close to $50 per barrel and it is quite unlikely that it will remain at this year low levels again. Led by Saudi Arabia, all GCC countries are facing mounting deficit due to plunging oil revenue.
The country’s net oil revenue for January-October period of 2016 plunged by 40.9 per cent to RO2,774.1mn from RO4,692.4mn for the same period of 2015, which was mainly due to a 31.5 per cent plunge in the average price of Oman Crude at $39.3 per barrel for the first eleven months, against $57.4 a barrel for the same January-November period of 2015.
Revenue from natural gas showed a fall of 7 per cent at RO1,097.2mn during the first ten months of 2016, compared to the same period of 2015. In fact, the average price of Oman Crude at $39.3 per barrel is much lower than the budget estimate at $45 per barrel.
The overall revenue of the government dipped by 25.5 per cent to RO5,514.5mn for January-October period of 2016.
The overall crude oil production, including natural gas, of the country grew by 3 per cent to 336.71 million barrels for the January-November period, which was equivalent to an average of 1,005,100 barrels per day.