News / Middle East

Oman Oil Minister Slams Gulf Culture of Energy Subsidies

FILE - Omani Oil Minister Mohammed bin Hamad Al Rumhy arrives for the Gulf Cooperation Council (GCC) Oil Ministers meeting in Riyadh, Oct. 9, 2012. FILE - Omani Oil Minister Mohammed bin Hamad Al Rumhy arrives for the Gulf Cooperation Council (GCC) Oil Ministers meeting in Riyadh, Oct. 9, 2012.
x
FILE - Omani Oil Minister Mohammed bin Hamad Al Rumhy arrives for the Gulf Cooperation Council (GCC) Oil Ministers meeting in Riyadh, Oct. 9, 2012.
FILE - Omani Oil Minister Mohammed bin Hamad Al Rumhy arrives for the Gulf Cooperation Council (GCC) Oil Ministers meeting in Riyadh, Oct. 9, 2012.
Reuters
Subsidized petrol and electricity programs are causing a huge waste of energy across the Gulf and threatening economies, Oman's oil and gas minister said on Sunday, in a rare official warning over surging demand in the region.
    
Energy prices are heavily subsidized in the six member states of the Gulf Cooperation Council (GCC), giving little incentive for their fast-growing populations to moderate use of big gas-guzzling cars or around-the-clock air conditioning.
    
As a result, top crude oil exporter Saudi Arabia is the world's sixth biggest consumer of oil, despite being only the 20th largest economy, and GCC members are all among the least energy-efficient countries globally. The United Arab Emirates and Oman have already seen their gas exports constrained by ballooning domestic demand.
    
"We are wasting too much energy in the region and the barrels that we are consuming are becoming a threat now, for our region particularly... I think we have a serious problem," Oman's oil and gas minister Mohammed bin Hamad al-Rumhy told the ADIPEC energy conference in Abu Dhabi.
    
"What is really destroying us right now is subsidies... We simply need to raise the price of petrol and electricity. In some countries in our region electricity is free and you leave your air conditioning for the whole summer when you go on holiday. That is really a crime," he said.
    
"Our cars are getting bigger, our consumption is getting bigger and the price is almost free. So you need to send a signal to the pockets of the public."
    
Action
    
It was not clear whether Rumhy's remarks indicated any fresh change to Oman's domestic energy pricing policies, which would be politically sensitive. His comments were unusually strong for a Gulf minister - officials in the region generally tend to avoid public criticism of long-established policies.
    
In a rare reform, Oman announced plans in early 2013 to double its industrial gas price to $3 per million British thermal units, still cheap by international standards, by 2015.
    
Oman is under more immediate pressure to reform than its wealthy Gulf neighbors as its energy resources are less ample. The International Monetary Fund has warned that Oman's state finances could slide into deficit in coming years because of recent public spending rises.
    
In 2010, the UAE government hiked its domestic gasoline price to 1.72 dirhams ($0.47) per liter to cut the burden of subsidies on public finances and promote efficiency. But after the Arab Spring uprisings began in the following year, plans for further price rises were put on hold to avoid stoking public discontent.
    
Omani diesel is still so cheap that trucks from the UAE drive over the border to fill up on it.
    
Population growth and artificially low energy prices in the GCC member countries - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE - mean the countries that the world has long relied upon for oil and gas need to spend heavily over the next decade just to meet their own energy needs.
    
According to a study published by consultants IHS on Sunday, over $1 trillion of investment is needed over the next 17 years to meet demand for gas and electricity in the Middle East and North Africa.
    
IHS estimates that demand for natural gas in the GCC is likely to rise more than 50 percent, from 256 billion cubic meters (bcm) in 2011 to 400 bcm in 2030. Oil demand will also grow more than 50 percent in the next 17 years, from around 4 million barrels per day to over 6.2 million bpd, IHS said.

You May Like

Video Is West Doing Enough to Tackle Islamic State?

There is growing uncertainty over whether West’s response to ISIS is adequate More

China Crackdown on Dual Citizens Causes Concern

New policy encourages reporting people who obtain citizenship in another country, but retain Chinese citizenship; move spurs sharp debate More

Video Coalition to Fight Islamic State Could Reward Assad

Losing ground to Islamic State fighters, Syria's government says it is ready to cooperate with international community More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Is West Doing Enough to Tackle Islamic State?i
X
Henry Ridgwell
August 29, 2014 12:26 AM
U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Pachyderms Play Polo to Raise Money for Elephants

Polo, the ancient team competition typically played on horseback, is known as the “sport of kings.” However, the royal version for one annual event in Thailand swaps the horse for the kingdom’s national symbol - the elephant. VOA Correspondent Steve Herman in Samut Prakan reports that the King’s Cup Elephant Polo tournament is all for a good cause.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.
Video

Video America's Most Popular Artworks Displayed in Public Places

Public places in cities across America were turned into open-air art galleries in August. Pictures of the nation’s most popular artworks were displayed on billboards, bus shelters, subway platforms and more. The idea behind “Art Everywhere,” a collaborative campaign by five major museums is to allow more people to enjoy art and learn about the country’s culture and history. Faiza Elmasry has more.
Video

Video Chinese Doctors Use 3-D Spinal Implant

A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video Uneasy Calm Settles Over Israel, Gaza Strip

Israel and the Gaza Strip have been calm since a cease-fire set in Tuesday evening, ending seven weeks of hostilities. Hamas, which controls Gaza, declared victory. Israelis were more wart. VOA’s Scott Bobb reports from Jerusalem.
Video

Video India’s Leprosy Battle Stymied by Continuing Stigma

Medical advancements in the treatment of leprosy have greatly diminished its impact around the world, largely eliminating the disease from most countries. India made great strides in combating leprosy, but still accounts for a majority of the world’s new cases each year, and the number of newly infected Indians is rising - more than 130,000 recorded last year. Doctors there say the problem has more to do with society than science. Shaikh Azizur Rahman reports from Kolkata.
Video

Video Scientists Unlock Mystery of Bird Flocks

How can flocks of birds, schools of fish or herds of antelope suddenly change direction -- all the individuals adjusting their movement in concert, at seemingly the same time? British researchers now have some insights into this behavior, which has puzzled scientists for a long time. VOA's George Putic has more.

AppleAndroid