Oman posts $545m budget surplus on higher oil prices, tax

Oman posted a budget surplus of $545m in the first two months of this year, helped by higher oil prices and tax collection.

The surplus compared with a deficit of OMR457m ($1.2bn) a year ago, according the Gulf nation’s finance ministry. Net oil revenue jumped 81 per cent to OMR1.1bn at the end of February.

Oman, which needs oil at about $61 a barrel to balance its books, has implemented a series of reforms to bridge the budget gap and lower its debt, including the introduction of a 5 per cent value-added tax last year. The finance ministry in January projected a budget deficit of $3.9bn for this year, based on oil prices at $50 a barrel.

Oil’s surge after Ukrainian crisis has pushed crude above the break-even level for almost all the Middle East’s producers. Oman plans to use the windfall to trim its debt and boost spending on projects, its ruler said last month.

S&P Global Ratings last week raised Oman’s credit ratings by one notch to BB-, with a stable outlook, due to higher oil prices, rising hydrocarbon production, and the government’s fiscal reform programme.

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