Economic assistance doled out by the Omani government to help fund the cost of providing subsidised services to the general population, as well as financial support to economically weaker sections of society, soared to RO 1.031 billion last year, up from RO 937.9 million a year earlier, according to figures released by the National Centre for Statistics and Information (NCSI).
The uptick, notwithstanding far-reaching efforts by the government to reduce spending in response to a steep slump in oil export revenues, contributed partly to an overall fiscal deficit totalling RO 2.622 billion in 2019, the Centre indicated in its newly published 2019 Statistical Report.
In fact, the subsidy burden on the government has been on the uptrend over the last four years, the report suggests. After reaching a high of RO 1.22 billion in 2015, it nearly halved to RO 660 million a year later following a landmark decision by the government to roll back longstanding subsidy on refined fuels. The total subsidy bill climbed to RO 700.3 million a year later in 2016.
Significantly, the power and water sector remained a major beneficiary of government subsidy, receiving a total of RO 600 million in funding support last year, up from RO 477 million in 2018. Operational subsidies provided to a number of government companies climbed to RO 190 million last year, versus RO 143 million a year earlier.
Support for Omani nationals receiving subsidised motor and marine fuel nearly doubled to RO 39.9 million last year, up from RO 20 million in 2018. Adding to the subsidy burden was the cost of providing low-interest housing development loans to underprivileged sections of the community. Subsidy paid towards certain food commodities totalled RO 2.9 million, down from RO 4.8 million in 2018.
Also bracketed under the category for ‘Government Participation and Subsidies to the Private Sector’ totalling RO 1.031 billion in 2019 year, was RO 78.1 million representing the total cost of Oman’s membership in a number of international, regional and local organisations.
Government revenues (oil and non-oil) dipped to RO 10.588 billion in 2019 compared to RO 10.950 billion a year earlier, aided by volatility in international energy markets amid a protracted economic slump.
Following the collapse of oil prices earlier this year, coupled with a global economic slowdown aggravated by the coronavirus pandemic, the Omani government announced a series of cost-cutting measures in the form of, among other actions, reduced budgetary allocations, freeze on new capital investments, and curtailments of personal allowances and non-essential official overseas travel – measures that have helped so far trim the 2020 State Budget by around RO 500 million.