Muscat – Oman’s government recorded a budget surplus of RO450mn in the first quarter of 2023, compared to a surplus of RO357mn in the same period of last year, the Ministry of Finance announced on Tuesday.

This RO93mn rise in the first quarter surplus was mainly due to a 24 per cent jump in the sultanate’s current revenue collection, amounting to RO787mn for the first three months of this year as against RO636mn in the same period a year ago.

A nine per cent increase in net oil revenue also contributed to the state coffers. Oman’s net oil revenue increased to RO1.707bn during January – March period of 2023 from RO1.565bn in the same period a year ago, mainly due to higher oil production and a slight increase in oil prices, according to the ministry’s Fiscal Performance bulletin.

Gas revenue, however, decreased by 12 per cent to RO720mn in the first quarter of this year compared to RO819mn recorded in the corresponding period of 2022. ‘This [decline in gas revenue] is due to the deduction of gas purchase and transport expenses from the total revenue collected from the Integrated Gas Company,’ the Ministry of Finance said.

The sultanate’s average daily oil production increased 3.7 per cent to 1.063mn barrels per day in the first quarter of 2023 compared to 1.025mn barrels per day recorded in the same period of 2022.

The average price at which Oman sold its crude oil during January – March period of 2023 increased nearly nine per cent to US$85 per barrel from US$78 per barrel recorded in the first three months of 2022.

Oman’s 2023 budget is based on an average oil price estimate of US$55 per barrel and average oil production of 1.175mn barrels per day.

Spending up 4%

At the end of first quarter of 2023, the Ministry of Finance paid more than RO325mn to the private sector. The ministry said that this reflects the payment vouchers received through the e-financial system, and which have completed the documentary cycle.

Oman’s total public spending during the first quarter of 2023 was recorded at RO2.767bn, which is RO99mn or four per cent higher compared to the same period a year ago.

Current expenditure of civil and government units increased 8.3 per cent to RO1.033bn in the first three months of this year compared to RO954mn in the same period a year ago.

Development expenditure of ministries and government units amounted to RO117mn, accounting for 13 per cent of the total – RO900mn – allocated for developmental spending for the whole of 2023.

Expenditure for contributions and other expenses (including government subsidies) jumped by 53 per cent to RO273mn in the first quarter of 2023 compared to RO179mn recorded in the same period of 2022. Subsidies for oil products amounted to RO78mn at the end of March 2023. Additionally, an amount of RO100mn was also transferred to future debt obligations in the first quarter.

Supported by an improving fiscal position due to government reforms and higher oil prices, the sultanate’s sovereign credit ratings were upgraded by various global rating agencies. Recently, global credit rating agencies S&P Global Ratings and Fitch Ratings revised their outlooks on Oman’s ratings to ‘positive’ from ‘stable’