MUSCAT — Oman’s actual budget surplus peaked at an all-time high of RO1.567 billion in the first eight months of 2008 compared with a surplus of RO652.4m in the same period of 2007, official figures revealed.

Strong oil prices allied with higher crude production helped to more than double Oman’s budget surplus in the first eight months of this year despite a sharp rise in public spending, the figures released by the Ministry of National Economy revealed.

Public revenue soared to a record high of RO5.78 billion from nearly RO3.93 billion in the same period last year.

The surplus surged despite a sharp rise in public spending to nearly RO4.21 billion in the first eight months this year from around RO3.27 billion in the first eight months of 2007. It is the highest budget surplus recorded by Oman in such a period and was in contrast with an assumed large deficit of around RO400 million.

The report showed the surge in revenues was mainly a result of a sharp rise in oil export income, which jumped by 68 per cent to around RO4.088b in the first eight months of 2008 from nearly RO2.42b in the same period of last year.

The oil income growth was due to a large increase in the price of Omani crude to an average $96.20 from $60.90 a barrel in the same period.

The Sultanate’s average oil production also swelled to 745,000 barrels per day (bpd) from 707,000 bpd as the country is pushing ahead with major oilfield development plans to reverse a steady decline in its oil output.

The increase was in line with plans by the government to push up crude production to 790,000 bpd in 2008 after a steep fall in output over the past five years because of lower than expected oil investment to fund gas projects.

Oman pumped nearly 714,000 bpd of crude oil last year, far lower than the 2002 peak of 898,000 bpd. Production has steadily receded during that period, dropping from 328m barrels in 2002 to 299m barrels in 2003 and 285m barrels in 2004.

It reached 283m barrels in 2005 and 269m barrels in 2006.

Production dived to 259m bpd in 2007 but the government said output would recover this year as it based its 2008 budget on higher oil production.

Last year, the government announced plans to invest nearly $10b until 2011 to lift crude output capacity to 900,000 bpd and increase gas production.