Couple of weeks back we read the news in the various local newspapers that the fuel subsidy in Oman has reached OMR1.3 billion. This is indeed is quite high and for sure this huge amount of money could be used for other developments of the country. But by reducing the subsidy on petrol the country will once again witness the price rise of all essential food items which have already doubled up in the past couple of years.
No matter whatever benefit the reduction of subsidy might add to the national economy, but by all means it is going to spark anger among the commons in Oman who have no knowledge of the complicated statistics of economics.
At a time when the government has increased the minimum wages of the locals, trying to synchronise the working conditions of the private sector with public sector, reorganised week ends, statutory holidays to make the commoners happier, the hike in petrol price due to reduction of subsidy will unnecessary increase social tension in the country.
It is needless to mention here that since IMF is always interested in cutting down the subsidies to support the financial stability of the countries, sooner or later the Government of Oman has to reduce the subsidy on petrol and diesel.
However, in my humble opinion as a consumer, I feel that in the interest of the commoners the price of petrol should remain the same and the subsidy should not be reduced unless it becomes absolutely necessary.
Will the withdrawal of subsidies help in strengthening the economy in Oman? That’s a prevalent question in the country now, since feelers are spreading around that the Oman government is contemplating a move on reducing the subsidies on oil price in the country.
Well this points to price hike in petroleum products in the near future, but how big depends on the percentage to the existing subsidies. Oman economy is healthy even now with surplus budget and his move can help boosting the forecast even bigger.
Economy in Oman is correlated to oil output and this dependence may not last for long.
Subsidies on oil cannot continue for many more years as somewhere in the future Oman knows oil may dry up and the nation may have to look to other means for boosting the economy.
Hence this idea of reducing the subsidies is factually a correct decision, which will help the nation’s vision for the future.
A common man may relate it as a government imposed burden, but factually it will be the only mean to help the country’s progress. This can save Oman’s economy from the edge of a future possible ‘fiscal precipice’.
The move can also help the economy from gradually moving from ‘surplus’ to deficit, like most of the third-world countries. A true citizen will not like his country dropping from the present strong fiscal position.
Considering this, I strongly recommend the withdrawal of subsidies or a cut in them, even if I may have to cough up a few more bucks for the daily necessities.