Oman's 2025 Budget Performance: Revenues Surge, Deficit Shrinks

Oman's Ministry of Finance announced on Sunday the final account of the State's General Budget for the fiscal year 2025, revealing a significant reduction in the financial deficit. Public revenues for the fiscal year 2025 were estimated at approximately OMR11.180 billion, while public spending was estimated at about OMR11.800 billion. The initial projected deficit for 2025 was forecast at around OMR620 million. However, the realised deficit for fiscal year 2025 decreased by 26 percent compared to the approved budget. The State's General Budget officially recorded a financial deficit of about OMR461 million by the end of fiscal year 2025.

Oil and Gas Drive Revenue Growth

Total oil revenues, encompassing both oil and gas, for Oman's fiscal year 2025 recorded an 11 percent increase compared to the approved budget. These revenues amounted to approximately OMR8.481 billion for the fiscal year. Net oil revenues during fiscal year 2025 reached about OMR6.640 billion, marking a 14 percent rise from the estimated OMR5.830 billion in the budget.

The average realized oil price reached approximately $72 per barrel in fiscal year 2025, exceeding the approved budget's oil price of $60 per barrel. Average production of oil and oil condensates for the period was about 999,000 barrels per day. The budget estimate for oil and oil condensates production had been approximately 1,001,000 barrels per day for fiscal year 2025.

Net gas revenues amounted to about OMR1.841 billion in fiscal year 2025. This figure represents a 4 percent increase compared to the approved budget estimates of approximately OMR1.777 billion for the same fiscal year. The average selling price of liquefied natural gas (LNG) also rose significantly, from $5.41 to about $7.49 during fiscal year 2025.

Spending and Non-Oil Revenue Analysis

Oman's total non-oil revenues reached approximately OMR3.641 billion by the end of fiscal year 2025, reflecting an increase of OMR68 million compared to the approved budget for the same period. Within non-oil revenues, current revenues amounted to about OMR3.602 billion, while capital revenues and recoveries reached approximately OMR39 million.

Regarding expenditures, current expenditures increased by 2 percent, recording about OMR8.726 billion by the end of fiscal year 2025, up from the approved budget of roughly OMR8.555 billion. Defence and security expenditures accounted for approximately OMR3.066 billion in fiscal year 2025. Civil ministries' expenditures stood at roughly OMR4.780 billion. Additionally, public debt service amounted to about OMR880 million during the fiscal year.

Total development expenditures surged by 38 percent, registering about OMR1.577 billion in fiscal year 2025. This figure exceeded the approved budget, which was implied to be lower. Spending on the infrastructure sector constituted about 43 percent of the total actual development spending for fiscal year 2025.

Development Spending and Subsidies

Spending on the social infrastructure sector accounted for 40 percent of Oman's total actual development spending for fiscal year 2025. The service production sector received 12 percent of the total actual development spending for the fiscal year, while the commodity production sector accounted for 5 percent. Total contributions and other expenses reached approximately OMR2.280 billion in fiscal year 2025. This figure represents an 8 percent rise compared to the approved budget of about OMR2.105 billion for the same fiscal year. Subsidies for petroleum products amounted to OMR124 million in fiscal year 2025, significantly exceeding the approved budget of about OMR35 million. Electricity sector subsidies reached approximately OMR606 million, an increase of OMR86 million compared to the approved figures for fiscal year 2025.

Context and Future Outlook

Actual public revenues for fiscal year 2025 reached OMR12.122 billion, marking an 8 percent increase compared to the approved budget estimates. Correspondingly, actual public spending by the end of fiscal year 2025 recorded approximately OMR12.583 billion, witnessing a 7 percent increase. The realised deficit for fiscal year 2025 amounted to approximately OMR461 million. Total public debt stood at roughly OMR14.6 billion by the end of fiscal year 2025, a decrease of about OMR15 million compared to 2024.

Zaher Marhoon Al Abri, Director General of the Directorate General of Treasury and Accounts at the Ministry of Finance, stated that "the actual performance of the State's General Budget was closely aligned with the approved budget. This alignment reflects the accuracy of financial planning and the realism of the assumptions upon which the approved budget estimates were based, in addition to the governmental efforts exerted to enhance spending efficiency and manage public finances competently." Al Abri further added in a statement to Oman News Agency (ONA) that "the Ministry of Finance continues to evaluate financial performance and is working in coordination with various government entities to enhance the efficiency of government spending and diversify sources of public revenues in order to achieve the targets of Oman Vision 2040."