RATIONAL APPROACH TO DEAL WITH OIL CRISIS

The Sultanate of Oman has strongly dealt with the issue of oil prices in the international market, and its negative impact on the treasury, although people feel its negative impact on oil producing countries depending solely on oil revenues. Citizens did not notice any major effects of slide in oil prices, though more than a year has passed since the crisis in the international market occured, as all steps are taken to face this crisis without affecting the lives of the people, and maintaining all services such as health, education, electricity and others. The cut in spending is confined to unnecessary sectors. Such actions reflect the positive way of dealing with this shocked many countries especially oil dependent ones.

The impact of the crisis is still not seen in many economic and development aspects, although there is no doubt that, the oil revenue constitutes more than 86 per cent of the State Budget, representing a great share to the gross domestic product (GDP).

The government has taken some tough steps to cut down expenditure. This is a usual government policy to deal with oil crisis in the market from time to time.

The government has already announced cuts in spending on unnecessary sectors including reduction in current spending. The estimates indicate a saving of around RO 2 billion without any remarkable impact upon different aspects of life.

This reflects the balance of the state financial policy, and shows the preventive procedures taken by the state to deal rationally and objectively with fall in oil prices.

The removal of subsidy on oil is considered one of the steps taken to face oil price impact, in order to bring the price on par with international prices.

So fuel prices change every month according to the rise and fall of crude price in the international market.

This is a natural case to face such crisis and to let all citizens and consumers know how to rationalise consumption.

Many countries around the world have removed subsidies on petrol although they have many possibilities to compensate fall in oil revenues.

The Sultanate withdraw from its reserves to compensate the fall in oil revenues as a normal procedure taken by countries who have sovereign funds to fill budget deficits in times of crisis, of course the Gulf neighbours are also doing the same.

These measures will stay longer especially if the oil prices are still falling, but the matter needs a critical solution and many aspects are to be looked into including raise in taxes and fee on many services, more austerity measures, reduction in spending on many aspects to be suitable for the financial status to keep the financial position of the state and to guarantee urgent services for all citizens. It is normal for countries to take such measures in times of crisis. Of course all these measures came after consultation between the government and the legislatures such as the consultative board and the State Council, believing in the importance wider participation in decision-making, and to ensure that such measures are accepted by one and all.

We hope that everyone understand all these measures which aim to keep the state financial position strong without any negative impact, believing that the citizen is the resource and the goal of evolution. crisis which

The Sultanate has already announced reduction in current spending. The estimates indicate a saving of around RO 2 billion without any impact on different aspects of life.