Oman budget forecasts price of oil to average $55 per barrel over course of the year
man has approved a budget for 2023 and expects revenues of OR10.05bn ($26.1bn) in the year ahead.
Oman’s Ministry of Finance made the estimation on the calculation that the average price of oil was calculated at $55 per barrel in 2023.
The estimate is in line with the principle of hedging in accordance with the state’s financial policy.
Oman 2023 budget
The calculation takes into account potential fluctuation in global prices that might occur as a result of unstable geopolitical events.
It also seeks to offset any uncertainty of future expectations about the performance of the global economy.
The revenue forecast is down by 5 percent from estimates endorsed in Oman’s 2022 budget.
The decline was due to a projected decrease in gas revenues registered in Oman’s 2023 budget.
Oman’s 2023 budget forecasts oil revenues of about OR5.32bn ($13.8bn). It is an increase of 18 per cent, compared to the previous year and constitutes about 53 percent of total general revenues.
Gas revenues were estimated at OR1.4bn ($3.6bn), thanks to the establishment of Integrated Gas Company, which will purchase and sell gas and then transfer gas revenues directly into the treasury. Gas revenues constitute 14 percent in the revenues.
Non-oil revenues in the endorsed 2023 budget are estimated at about OR3.33bn ($8.7bn), down by 0.3 percent from the previous year’s estimates.
Expenditures in the 2023 state budget were estimated to be OR8.62bn ($22.5bn).
It will be distributed as follows:
- 35 percent as defence and security expenditures
- 51 percent as expenditures of civil ministries
- 14 percent as public debt service
Oman’s Finance Ministry estimates it will boost oil production by more than 10% next year to 1.175m barrels per day.
Last month, S&P Global upgraded the Gulf nation’s credit rating to BB, from BB-, on improved fiscal performance and lower public debt.