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 Protests Continue in Ferguson, Spread to Other US Cities

Missouri officials say deployment of more than 2,000 National Guard soldiers helps curb second night of rampant arson and looting in Midwestern town More

Video Ebola, Crackdown on Illegals Hit Business in Guangzhou

Chinese city has largest community of Africans in Asia More

Video Legendary Lebanese Actress, Singer Sabah Dies at 87

Music and film diva, affectionately called 'Sabbouha' by millions of her fans, performed at Carnegie Hall in New York, Royal Albert Hall in London, Olympia in Paris, Sydney Opera House in Sydney More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Aung San Suu Kyi: Myanmar Opposition to Keep Pushing for Constitutional Changei
X
November 24, 2014 10:09 PM
Myanmar opposition leader Aung San Suu Kyi says she and her supporters will continue pushing to amend a constitutional clause that bars her from running for president next year. VOA's Than Lwin Htun reports from the capital Naypyitaw in this report narrated by Colin Lovett.
Video

Video Aung San Suu Kyi: Myanmar Opposition to Keep Pushing for Constitutional Change

Myanmar opposition leader Aung San Suu Kyi says she and her supporters will continue pushing to amend a constitutional clause that bars her from running for president next year. VOA's Than Lwin Htun reports from the capital Naypyitaw in this report narrated by Colin Lovett.
Video

Video Mali Attempts to Shut Down Ebola Transmission Chain

Senegal and Nigeria were able to stop small Ebola outbreaks by closely monitoring those who had contact with the sick person and quickly isolating anyone with symptoms. Mali is now scrambling to do the same. VOA’s Anne Look reports from Mali on what the country is doing to shut down the chain of transmission.
Video

Video Ukraine Marks Anniversary of Deadly 1930s Famine

During a commemoration for millions who died of starvation in Ukraine in the early 1930s, President Petro Poroshenko lashed out at Soviet-era totalitarianism for causing the deaths and accused today’s Russian-backed rebels in the east of using similar tactics. VOA’s Daniel Shearf reports from Kyiv.
Video

Video Hong Kong Protests at a Crossroads

New public opinion polls in Hong Kong indicate declining support for pro-democracy demonstrations after weeks of street protests. VOA’s Bill Ide in Guangzhou and Pros Laput in Hong Kong spoke with protesters and observers about whether demonstrators have been too aggressive in pushing for change.
Video

Video US Immigration Relief Imminent for Mixed-Status Families

Tens of thousands of undocumented immigrants in the Washington, D.C., area may benefit from a controversial presidential order announced this week. It's not a path to citizenship, as some activists hoped. But it will allow more immigrants who arrived as children or who have citizen children, to avoid deportation and work legally. VOA's Victoria Macchi talks with one young man who benefited from an earlier presidential order, and whose parents may now benefit after years of living in fear.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.
Video

Video Tensions Build on Korean Peninsula Amid Military Drills

It has been another tense week on the Korean peninsula as Pyongyang threatened to again test nuclear weapons while the U.S. and South Korean forces held joint military exercises in a show of force. VOA’s Brian Padden reports from the Kunsan Air Base in South Korea.
Video

Video Mama Sarah Obama Honored at UN Women’s Entrepreneurship Day

President Barack Obama's step-grandmother is in the United States to raise money to build a $12 million school and hospital center in Kogelo, Kenya, the birthplace of the president's father, Barack Obama, Sr. She was honored for her decades of work to aid poor Kenyans at a Women's Entrepreneurship Day at the United Nations.
Video

Video Ebola Economic Toll Stirs W. Africa Food Security Concerns

The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Chaos, Abuse Defy Solution in Libya

The political and security crisis in Libya is deepening, with competing governments and, according to Amnesty International, widespread human rights violations committed with impunity. VOA’s Al Pessin reports from London.
Video

Video US Hosts Record 866,000 Foreign Students

Close to 900,000 international students are studying at American universities and colleges, more than ever before. About half of them come from Asia, mostly China. The United States hosts more foreign students than any other country in the world, and its foreign student population is steadily growing. Zlatica Hoke reports.

All About America

AppleAndroid