Fossil Fuel Subsidy and the Implications for Public Finance in the Sultanate of Oman

By

ACKNOWLEDGEMENT

My thanks go out to all who have helped me complete this study and with whom this project may have not been possible. In particular, my gratitude goes out to friends, facilitator and family for extensive and helpful comments on early drafts. I am also deeply indebted to the authors who have shared my interest and preceded me. Their works provided me with a host of information to learn from and build upon, also served as examples to emulate.

DECLARATION

I, (), would like to declare that all contents included in this thesis/dissertation stand for my individual work without any aid, and this thesis/dissertation has not been submitted for any examination at academic as well as professional level previously. It is also representing my very own views and not essentially which are associated with university.

Signature:

ABSTRACT

This research study is an attempt to study the fossil fuel subsidy and the implications for public finance in the sultanate of Oman. Fossil fuel subsidy is a major source of concern for the Sultanate of Oman, because as a result of these high subsidies t6hey are missing on the benefits to the commendable segment of the society. Along, with that they are also missing the utilization of exporting the subsidized Omani fuel to other countries for a profit. This research study has adopted a quantitative method and used a questionnaire in order to obtain the responses of 100 participants working in different departments and at different designations of the Ministry of Petroleum resources in Oman. The results of the dissertation showed that there is a significant relationship between the agricultural sector's output and the fluctuations in the prices of petroleum in Oman and there is a significant relation between the fuel subsidy removal and the output of the agriculture sector in Oman.

LIST OF ABBREVIATIONS

GDP

Gross Domestic product

MENA

Middle East and North Africa

MENA

National Health Service

ORPIC

Oman Oil Refineries and Petroleum Industries Company

RO

Reverse Osmosis

ROI

Return on Investment

SR

Sohar Refinery

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

LIST OF FIGURESIX

LIST OF TABLESX

CHAPTER ONE: INTRODUCTION1

1.1 Background1

1.2 Statement of the problem2

1.2.1 Historical Overview on Oman Domestic Market3

1.2.2 Comparing International Oil Prices with Oman4

1.2.3 The Government Subsidy7

1.2.4The Financial Burden7

1.3 The Hypothesis Project8

1.4 Research Aim10

1.5 Research Objectives10

1.6 Significance of the Study11

1.7 Research Gap12

CHAPTER TWO: LITERATURE REVIEW14

2.1 Fossil Fuel a Multifarious Concern for the Sultanate of Oman16

2.2 Impact of Fossil Fuel Subsidies on the Consumers17

2.3 Fossil Fuel Policies inside the Sultanate of Oman18

2.4 Impact of Fossil Fuel Production on Federal Revenues and Expenditures19

2.4.1 Federal revenues20

2.4.2 Volumetric Ethanol Excise Tax Credit20

2.4.3 Federal expenditures21

2.4.4 Income tax revenues21

2.4.5 Cellulosic ethanol production facility construction programs22

2.4.6 Import tariff22

2.5 Fossil Fuels as the Substitute for Gasoline23

2.6 Oil and Transportation Fuels24

2.7 Financial Implications for Energy Subsidies in the Sultanate of Oman25

2.8 Development and Production of Fossil Fuels inside Oman26

CHAPTER THREE: RESEARCH METHODOLOGY29

3.1 Research Design29

3.2 Primary Research30

3.2.1 Interviews31

3.2.2 Field Instrument32

3.3 Secondary Research32

3.4 Qualitative v/s Quantitative Research33

3.5 Sample Size34

3.5.1 Sampling Design:35

3.6 Data Analysis Technique36

3.6.1 Chi-Square Test36

3.7 Research Limitations37

CHAPTER FOUR: DISCUSSION AND ANALYSIS38

4.1 Introduction38

4.2 Questionnaire Analysis38

4.3 Hypothesis ...