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Omani Budget Surplus Increases 26% with Growth of Oil Revenues

The Omani state budget surplus increased by about 26 percent on an annual basis in the first quarter of 2023. (Asharq Al-Awsat)
The Omani state budget surplus increased by about 26 percent on an annual basis in the first quarter of 2023. (Asharq Al-Awsat)
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Omani Budget Surplus Increases 26% with Growth of Oil Revenues

The Omani state budget surplus increased by about 26 percent on an annual basis in the first quarter of 2023. (Asharq Al-Awsat)
The Omani state budget surplus increased by about 26 percent on an annual basis in the first quarter of 2023. (Asharq Al-Awsat)

The Sultanate of Oman announced, on Tuesday, that its public budget surplus increased by about 26 percent on an annual basis in the first quarter of 2023, with the growth of its net oil revenues.

The Omani Ministry of Finance said in a report that the general budget recorded a surplus of about 450 million riyals ($1.2 billion) at the end of the first quarter of 2023, compared to a surplus of 357 million riyals in the same period of 2022.

It added that the Sultanate’s total revenues increased by 6 percent to reach 3.2 billion riyals in the first three months of the year, compared to 3.02 billion a year ago, while spending rose 4 percent to 2.767 billion riyals from 2.6 billion.

Data from the Ministry of Finance showed an increase in net oil revenues by 9 percent to about 1.7 billion riyals, while net gas revenues decreased by 12 percent to 720 million riyals. The ministry attributed the growth of oil revenues, which accounted for about 53 percent of total revenues, to the rise in the average price of a barrel of crude and the average production.

According to the statement of the Ministry of Finance, the current collected revenues until the end of the first quarter increased to reach 787 million riyals, compared to 636 million riyals in the same period in 2022.

The current expenditures of the civil ministries amounted to about 1.3 billion riyals, compared to 954 million riyals in the first quarter of 2022, while the development expenditures of the ministries and civil units amounted to 117 million riyals.

The total contributions and other expenditures amounted to about 273 million riyals, up by 53 percent, compared to 179 million riyals for the same period last year.

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Pakistan Ends Power Purchase Deals to Cut Costs

A power transmission tower is seen in Karachi, Pakistan, January 24, 2023. REUTERS/Akhtar Soomro/File Photo
A power transmission tower is seen in Karachi, Pakistan, January 24, 2023. REUTERS/Akhtar Soomro/File Photo
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Pakistan Ends Power Purchase Deals to Cut Costs

A power transmission tower is seen in Karachi, Pakistan, January 24, 2023. REUTERS/Akhtar Soomro/File Photo
A power transmission tower is seen in Karachi, Pakistan, January 24, 2023. REUTERS/Akhtar Soomro/File Photo

Pakistan's government has reached an agreement with utilities to end power purchase contracts, including one with Pakistan's largest private utility that should have been in place until 2027, as part of efforts to lower costs, it said on Thursday.

The news confirms comment from Power Minister Awais Leghari to Reuters last month that the government was renegotiating deals with independent power producers to lower electricity tariffs as households and businesses struggle to manage soaring energy costs.

Earlier on Thursday Prime Minister Shehbaz Sharif said Pakistan has agreed with five independent power producers to revisit purchase contracts. He said that would save the country 60 billion rupees ($216.10 million) a year.

The need to revisit the deals was an issue in talks for a critical staff-level pact in July with the International Monetary Fund (IMF) for a $7-billion bailout.

Prior to the prime minister's announcement, Pakistan's biggest private utility, Hub Power Company Ltd, said the company agreed to prematurely end a contract with the government to buy power from a southwestern generation project.

In a note to the Pakistan Stock Exchange, it said the government had agreed to meet its commitments up to October 1, instead of an initial date of March 2027, in an action taken “in the greater national interest.”

A decade ago, Pakistan approved dozens of private projects by independent power producers (IPPs), financed mostly by foreign lenders, to tackle chronic shortages.

But the deals, featuring incentives, such as high guaranteed returns and commitments to pay even for unused power, resulted in excess capacity after a sustained economic crisis reduced consumption.

Short of funds, the government has built those fixed costs and capacity payments into consumer bills, sparking protests by domestic users and industry bodies.

Pakistan has begun talks on re-profiling power sector debt owed to China and structural reforms, but progress has been slow. It has also said it will stop power sector subsidies.