Omanis call for government cap on fuel prices in first protest since 2011

The cost of petrol at the pump in Oman has increased by almost 75 per cent since the government scrapped its fixed-price policy in January, 2016. Silvia Razgova / The National

MUSCAT // Hundreds of Omanis on Thursday staged the first demonstration in the country since 2011, calling for a government cap on fuel prices, saying the rising cost of petrol was eating into their pay cheques.

The cost of petrol at the pump has increased by almost 75 per cent since the government scrapped its fixed-price policy in January last year, from 120 Omani baisa (Dh1.14) per litre for super petrol to 196 baisa in February. Prices are adjusted monthly based on international crude oil prices.

The 2011 protests were against corruption but this time people were voicing worries over how to make ends meet.

“The high petrol prices are eating away our salaries. Petrol prices go up every month. The government needs to consider our situation. Not all of us can afford such uncertainties. Electricity and water bills have also gone up and we are getting the same monthly pay,” said Khalifa Al Humaid, a civil servant, one of the protesters.

He was among about 500 people who demonstrated outside the ministry of oil and gas, some of them carrying placards that said: “The government must rise our salaries” and “200 baisa is too much.”

The cabinet decided to remove energy subsidies on January 15 last year in a bid to offset mounting budget deficits after crude oil prices tumbled to as low as US$27 – their lowest since November 2003 – from about $120 per barrel in 2014. Crude prices have recovered since and currently stand at about $52 a barrel.

Electricity and water consumption were among the casualties of price increases as subsidies on those utilities were also cancelled at the same time, in January last year. Charges for both went up by about 40 per cent.

Fareed Al Hubaishi, an electrical engineer who was at the protest, urged the government to put a cap on petrol prices and stop the price uncertainty.

“We understand the government cannot scrap the energy subsidies because of the economic situation but it has to keep the petrol prices constant at a reasonable level so we know exactly how to budget our domestic expenditure. A fixed price of 150 baisa per litre is what I think would be a fair price,” Mr Al Hubaishi said.

Oman produces about 980,000 barrels per day of crude and depends heavily on oil revenues, which make up 83 per cent of its total income.

According to the ministry of finance, Oman earned an average of only $39 per barrel last year, compared to $66 a year earlier. With a budget deficit of 5.3 billion riyals (Dh50.6bn) in 2016, Oman has already announced plans for borrowings worth 2.5 billion riyals from domestic and international markets.

Other protesters said the government should increase salaries if it was determined to keep floating petrol prices.

“I get only 740 riyals a month. I have three children. I drive about 80 kilometres a day up and down, to my office and back home. Before the price rise, my petrol bill was about 60 riyals a month. I estimate this month it will be about 100 riyals – almost double what it was,” said Abdulrahim Al Hajri, a primary schoolteacher.

“Our salaries need to go up to keep up with this inflation otherwise it will be hard to keep up with costs.”

Officials at the ministry of finance and the ministry of oil and gas could not be reached for comment.