|A snap from my vacation... Niagara Falls|
Well that was a fantastic July for me. Lots of time spent with the family and friends, and even snuck in a side trip to Cuba with just my wife as well - a real treat considering we have 2 kids under 3! We even saw a few friends who have lived in Muscat (or still do) whilst back too - which was fun!
Now it's back to the daily grind that is working life here in Muscat. And still, 9 Omani summers in, it's really hot isn't it?! Or is it just me coming back from not-so-hot climes? At least the schools haven't started up again yet (and the traffic that goes with it).
It seems that a few things have happened since I've been away, but I think most importantly the news that the UAE has lifted it's subsidies on fuel is probably the biggest thing I've noticed that might affect us here in Oman. The price for Super fuel in the UAE is now about 235bz a liter versus 120bz a liter here (ok or 121bz in outlying areas). So basically it's double (bearing in mind that the oil price is really low right now). The UAE had been pushing it's prices up bit by bit over the years and so the actual increase on August 1st was about 24% - and that's only for August... the price will change every month!
If Oman were to do the same as the UAE and link fuel pricing to world markets, we'd see the price at the pump basically double (whereas diesel will probably increase only a little bit) based on current market prices. Which would probably lead to a lot of people being very upset. I suspect that if there was to be a review of fuel pricing and its subsidies then perhaps it'd be a gradual adjustment of the subsidy.
I guess we'll probably see the same on our power and water bills too, as subsidies there will be reviewed as well. From a purely economic standpoint, it makes sense to revise the subsidies on fuel, but of course there are other issues to consider. Back in January when Oman's 2015 budget was posted, it was based on RO 1.8 billion in subsidies for fuel & gas (which is used for power and water) and Oman went into 2015 with it's budget knowing they were going to have a RO 2.5 billion shortfall in funding. Here we are in August and the latest projections are showing a RO 3.5 billion shortfall for 2015... I'd say a review of subsidies is guaranteed, I'm more interested in what Oman's going to do with it's other expenditures. I think 2016 is going to be a tough year, both financially and politically!
So, do you think there will be a change to fuel subsidies here in Oman, and if you do, when?!