Omani finance ministry official on Wednesday said higher than expected oil prices will help reduce OR1.2bn ($3.1bn) budget deficit projected for 2012.
The Gulf nation sold its oil at an average price of $115 per barrel in the first five months of 2012, the finance ministry statement said. It added that revenue peaked around OR5bn ($12.99bn) during the same period.
“Up to May, we have sold our oil 50% above the price we estimated for the 2012 budget, and that has pushed up revenues beyond our expectations,” a finance ministry official in the budgeting department told Reuters.
“At this rate, we are comfortably going to wipe out the deficit,” said the official, who did not want to be identified due to ministerial restrictions.
Oman posted a 1.5 billion rial ($3.8 billion) budget surplus for the Jan-Apr period of this year thanks to a surge in oil revenues. Inflation also dropped to 3% in April, the Gulf country’s economy ministry data showed last month.
Reuters polled analysts in March which expected the Sultanate to post a fiscal surplus of 5% of GDP in 2012, up from 3.5% last year.
The price of Brent crude plunged $40 to as low as $88 per barrel between March and June but has since recovered to around $100. Oman derives around three-quarters of its budget income from oil revenues.
Muscat has based its 2012 budget plan on an oil price of $75 per barrel, with expenditure projected at OR10bn ($25.97bn) and revenue at OR8.8bn ($22.86bn).
The GCC nation’s budget break-even oil price was estimated at $81 per barrel this year by the International Monetary Fund in December last year. However, analysts believe the level is expected to rise to $105 by 2016.