Falling oil revenues prompt subsidy cuts
Omans Oil & Gas Ministry has issued new fuel prices, which will take effect from 15 January.
The price of regular fuel was raised 22.8 per cent to RO0.140 ($0.36) a litre.
Oman has followed the UAEs strategy of removing fuel subsidies and setting prices monthly based on global market prices.
|Type||Oman old price (RO)||Oman price 15 January - 15 February (RO)||Percentage change||UAE price January|
|Super petrol||0.120||0.160||33.3||AED1.79 (RO0.190)|
Utilities prices are also expected to be raised.
The subsidies are being cut in response to falling oil prices, which reached as low as $31 on 11 January. Hydrocarbon revenues made up 84.3 per cent of government revenues in 2014.
In the new budget, subsidies were cut 64 per cent from RO710m in 2015 to RO400m in 2016.
The subsidy cuts will mean that noticeable increases in the cost of living may be inflationary. Omans inflation rates were low in 2015 due to falling commodity prices globally. The general price index had fallen 0.55 per cent annually at the end of November 2015, after turning negative in September.
Bahrain also announced higher petrol prices to take effect from 12 January, while Saudi Arabia is planning to cut fuel subsidies.