Oman to start removing utility subsidies from January 2021

Oman, which has one of the GCC’s largest budget deficits, will start removing electricity and water subsidies for the biggest consumers as soon as next month.

Electricity subsidies will be removed completely by January 2021 for big consumers, including industrial, tourism, commercial and government entities.

Utility tariffs will be raised gradually until the subsidies are completely lifted in 2025 and a national support system will be implemented to help low-income consumers.

Oman has been hammered by the coronavirus pandemic as well as lower crude prices, forcing it to cut spending. The country also plans to impose a 5 per cent value-added tax from next year.

The subsidies for the electricity and water sector are about $1.95bn, according to the 2020 budget.