4/5/2011 Increase of oil prices boost GCC gov'ts revenues
KUWAIT, High oil prices would boost revenues and provide the GCC governments additional resources for its additional expenses aimed at enhancing the standard of living of citizens, without seeking sovereign wealth funds, a report said Tuesday.
The report, released by the National Bank of Kuwait (NBK), said the increase of USD one for an oil barrel would add USD 4.5 billion per annum to the GCC governments' revenues.
In case of achieving an average price of USD 100 per barrel of oil this current year, GCC governments' revenues would exceed USD 100 billion in comparision to previous year, or 28 percent of expenditures set for this year, report added.
The report said that high oil prices in the past few months encouraged the GCC government for extra spending without recourse to sovereign wealth funds.
_It said that the OPEC crude basket price increased from USD 75 pb in September 2010, to USD 115 in early March 2011, puming oil prices to more than 50 percent from their 2010 average and 22 percent of their 2008 average.
The report predicted no significant oil prices reduction in the short term.
Furthermore, the report explained that the increase in global supply of natural gas was offset by a rise in prices compared to crude oil in recent months, which means less severe increase of fiscal revenue derived from natural gas with price of natural gas (equivalent to oil barrel) about USD 22 in March.
The Saudi government's measures - which includes an increase in wages by 15 percent for public sector employees, the commitment to build 25,000 new homes with additional expenses estimated at USD 130 billion for half to be spent this year - will exceed the extra turnover resulting from oil revenues set at USD 100 pb.
