Oman’s Supreme Council for Planning has released its 2016-2020 plan to halve the state’s dependence on oil.
At the core of the plan is reducing reliance on hydrocarbons by encouraging manufacturing, mining, transport, and tourism through 500 policies and programmes.
With the aim of reducing oil’s contribution to the gross domestic product from 44 to 22 percent, and reducing natural gas’ contribution from 3.6 to 2.4 percent.
The plan is based on assumptions of constant production of 99,000 barrels per day in Oman, and prices of oil per barrel, being $45 in 2016, $55 in 2017 and 2018, and $60 for 2019 and 2020.
Public-private partnerships are prominent in the plan, and 52 percent of investment under it is expected to come from the private sector, a 10 percent increase from the previous plan.
Slashing Subsidies
As with the rest of the GCC, Oman is under intense pressure from rock bottom oil prices. Immediate effects will be felt in Oman’s slashing subsidies on fuel, housing loans and utility bills to 400 million rials ($1.04 billion), from 1.11 billion rials ($2.88 billion) in 2015.
The government forecasts its 2016 deficit to reach 13 percent of GDP. The Ministry of Finance has stated that it plans to plug the deficit with a combination of reserves, borrowing from international and local markets, and grants.
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