Oman to cap fuel prices until end of 2022

Prices will be capped at October 2021 rates

A man passes an Oman Oil gas station in Muscat, the capital of the Sultanate of Oman on Wednesday, Oct. 12, 2011. (Silvia Razgova/The National)

Oman's government will cap fuel prices for drivers, making up the difference if oil prices should rise, Sultan Haitham bin Tariq said on Tuesday.

Prices will be capped at an average of October's fees: M91 at 229 baisas/litre, M95 at 239 baisas/litre and diesel at 258 baisas/litre.

The announcement came after Oman's oil refineries reported a 13 per cent increase in fuel production in 2021 compared with 2020, figures released in September by the National Centre for Statistics and Information showed.

Domestic petrol sales rose by 10 per cent and exports reached 3,850,300 barrels, or a 41 per cent increase compared to 2020.

Oil prices have skyrocketed this year, with a global economic recovery boosting consumption while crude production returns at a more modest pace.

Demand has jumped back to pre-pandemic levels and is poised to go even higher early next year, Russell Hardy, chief executive officer of Vitol Group, told Bloomberg.

Mr Hardy said market supply and demand is “going to be reasonably tight” for the next 12 months and a price spike to $100 a barrel is “certainly a possibility".

Saudi Arabia last week raised its export oil prices to all regions.

Sultan Haitham made a series of other directives in Tuesday's Cabinet meeting, including lifting a ban on promoting state employees. The ban was instituted in 2014 amid falling oil prices, but now those eligible will be considered.

He called for the establishment of an independent unit under his direction to measure the performance and efficiency of government institutions. In August 2020, Sultan Haitham revamped the government, creating new ministries and merging others.

Updated: November 9th 2021, 4:56 PM