MUSCAT: The Omani government’s subsidy allocations for key utilities and public services totalled a substantial RO 7.3 billion over the 2021–2025 period of the 10th Five-Year Plan, underscoring its continued commitment to shielding citizens from cost pressures while safeguarding social stability and economic resilience.
According to the Ministry of Finance, these allocations were made through the annual State General Budgets of the 10th Plan and covered oil products, electricity, water and sewage services, the solid waste sector, basic food commodities, development and housing loan interest subsidies, as well as the social protection system.
“The Government has made efforts to mitigate the impact of its initiatives designed to stimulate economic growth and enhance fiscal performance on the most vulnerable segments of society”, the Ministry noted. “In this regard, it has prioritised national support for basic services and products”, adding that these allocations aim to ensure social stability and cushion citizens against oil price volatility and inflation, as outlined in its 2026 State General Budget handbook.
Of the total subsidy envelope, approximately RO 2.733 billion was directed towards the electricity sector during the 10th Plan period, averaging about RO 546 million annually. Over the longer term, however, the government’s Fiscal Balance Plan and tariff reform agenda envisage a gradual shift away from blanket electricity and water subsidies towards cost-reflective pricing, alongside the redirection of support to eligible low-income households through the National Subsidy System.
Subsidies for transport fuels amounted to RO 1.464 billion over the five years of the 10th Plan, representing roughly 20 per cent of total subsidy allocations. These subsidies were designed to stabilise domestic fuel prices amidst global oil market volatility. From a peak of RO 730 million in the 2022 Budget, fuel subsidies have since declined sharply, easing to an estimated RO 90 million in 2025.
Water and sewage subsidies totalled RO 904 million over the plan period, while interest subsidies on development and housing loans amounted to RO 227 million. Other sectors benefitting from government support included basic commodities (RO 71 million), solid waste management (RO 357 million) and transport services (RO 381 million). Notably, the Social Protection System — introduced for the first time in the annual budget in 2024 — received cumulative allocations of RO 1.078 billion.
For fiscal 2026, the government continues its policy of supporting essential public services and utilities, with sizable allocations for social protection, utilities, transport and debt management. These include RO 614 million for the social protection system, RO 509 million for the electricity sector, RO 241 million for water, wastewater and waste services; and RO 82 million for transport.
Overall, total allocations under the budgetary subhead “Contributions and Other Expenses” increased by 6 per cent to RO 2.475 billion in the 2026 Budget, up from RO 2.345 billion estimated in 2025. This increase, the Ministry explained, reflects higher allocations for oil product subsidies — up by RO 55 million to RO 90 million — as well as an additional RO 65 million in subsidies for the electricity, water and sewage sectors, bringing total utility subsidies to RO 779 million.
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