Oman cuts subsidy bill by 20%

The government is introducing new fees to make up for lost oil revenues



Oman has cut its subsidy bill by nearly 20 per cent over the last three years, the country’s central bank has said.

The reduction follows the lifting of subsidies on fuel in 2016 and electricity for corporate consumers in January this year.

In its annual report, the bank said subsidies and other transfers fell from OMR562.3m ($1.46bn) in 2013 to OMR451.5m ($1.17bn) last year.

Oman like other Gulf countries was hit hard by the reduction in oil prices, with crude accounting for up to 80 per cent of government revenues.

The government is also moving ahead with fee and tax increases to meet an estimated deficit of OMR3bn ($7.79bn) for the year.

Read: Oman 2017 budget projects smaller deficit as govt plans tax hikes

This included the recent quadrupling of fees for tourist visas.

Read: Oman quadruples cost of tourist visas

The sultanate recorded a deficit of 21 per cent of GDP last year, according to the central bank.

Spending on salaries and allowances also decreased 3.1 per cent to OMR3.3bn ($8.57bn) in 2016.

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