Oman close to cutting LPG subsidies: Official

Oil Ministry says government mulling removing LPG subsidies for commercial, industrial entities; households not to be affected

LPG is used in heating appliances, cooking equipment and vehicles in industrial operations.
LPG is used in heating appliances, cooking equipment and vehicles in industrial operations.

Oman is close to cutting state subsidies for liquefied petroleum gas (LPG) that keep a lid on domestic prices of the fuel, Salim al-Aufi, undersecretary at the Ministry of Oil and Gas, told Reuters on Wednesday.

"We are studying lifting the subsidy for LPG for both commercial and industrial entities very soon. But individuals will not be affected by it," Aufi said, giving no details on the timing or the size of the cuts.

Low oil prices have saddled Oman with a big state budget deficit relative to the size of its economy, and it is looking for ways to cut its deficit to OMR3.3bn ($8.6bn) this year from OMR4.5bn ($11.68bn) last year.

LPG is used in heating appliances, cooking equipment and vehicles, and cutting the subsidies would likely raise costs for industry.

Oman spent $7.3bn on all forms of energy subsidies last year, the International Monetary Fund estimated.

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