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| 16 December, 2017

Oman introduces new fuel subsidy scheme

Nationals whose monthly income from all sources is not more than 600 riyals eligible for scheme

A view shows a petrol nozzle refuelling a car at a petrol station in Viterbo, north of Rome, September 25, 2012. Image used for illustrative purpose.

A view shows a petrol nozzle refuelling a car at a petrol station in Viterbo, north of Rome, September 25, 2012. Image used for illustrative purpose.

REUTERS/Giampiero Sposito
Muscat: Oman’s government has announced plans to introduce a new fuel subsidy scheme for low-income Omanis starting from January.

The government’s decision aims to ensure the welfare of citizens. As per this mechanism, Omani citizens who meet eligibility requirements will get 200 litres per month of M91 petrol at a cost of not more than 180 baisa (about Dh1.71) per litre.

The mechanism relies on a system that connects the Royal Oman Police’s system with fuel marketing companies to ensure accuracy and smooth implementation. This scheme is applicable to Omani citizens above the age of 18, who own in their names a vehicle registered with Royal Oman Police or a fishing boat registered with the Ministry of Agriculture and Fisheries — if their total monthly income from all sources is not more than 600 riyals.

The cap of 200 litres of M91 petrol was based on an analysis of the data of vehicles registered in the Sultanate, and fuel consumption rate in the past five years. The quantity is also in line with the average consumption by Omani families as shown by figures from the National Centre for Statistics and Information.

Those covered include all Omani employees, entrepreneurs, job seekers, students, housemaids and retirees, as well as fishermen who meet the said eligibility terms.

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A special mechanism for farmers will be announced soon.

Omanis who meet requirements are required to register at the national subsidy system’s website. The system will be effective from January 2018.

More than 16,000 Omanis have already registered for the programme.

In November, Oman’s Council of Ministers allocated 100 million riyals to help citizens most impacted by the removal of fuel subsidies.

The Council of Ministers tasked a specialised committee to finalise mechanisms and executive procedures to lend support to deserving segments of society following the liberalisation of fuel prices, with the aim of alleviating the impact on these segments.

In January 2016, the Omani government started a review of fuel prices, following in the footsteps of other Gulf states that increased fuel prices.

Oman introduced M91 fuel in November 2016, which is a new type of petrol that has octane levels between M90 and M95.

The Council of Ministers ordered that the price of M91 fuel be frozen at 186 baisas until the government finds alternative mechanisms to help those who have been affected by the fuel price hike. The 2017 general budget included major spending cuts due to the plunge in oil prices.

Oman has smaller oil reserves and less of a cushion in government savings than its wealthier neighbours, making it vulnerable to the impact of lower oil prices that has depressed growth across the region.

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