Oman's ruler suspends decision to scrap price controls

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Oman's ruler Sultan Qaboos bin Said.

Oman's ruler Sultan Qaboos bin Said.

Oman's ruler Sultan Qaboos bin Said has put on hold the government's decision to scrap price controls for most products after a public uproar triggered an intervention by his consultative council, state news agency ONA said.

Under new rules announced last week, retailers and traders no longer needed to ask the government for permission to raise prices, except for 23 basic items such as rice, tea and fish which remained controlled.

But after debating the new rules on Tuesday, the advisory Shura Council drafted a letter to the sultan, recommending that he postpone their adoption until other laws protecting consumers and preventing monopolies could be enacted.

"The Council agrees completely with the principles of free-market economy and that the state shouldn't intervene in the market, leaving it to the power of supply and demand," ONA quoted the letter as saying.

"And for this to happen, it is important to maintain a balance between traders' rights and consumers' rights," added the council, whose elected members received a public motion signed electronically by about 2,000 petitioners.

Sultan Qaboos, who has been ruling Oman since 1970, responded by suspending the rules based on his understanding of the needs of the public, ONA reported.

The new rules had caused an unusual public furore in the absolute monarchy, with hash tags objecting to the reform drawing tens of thousands of tweets, even though economists predicted only a minor impact on inflation.

Oman, a small oil exporter, faced sporadic street protests in 2011 that demanded jobs and an end to corruption. It responded by boosting welfare spending and creating tens of thousands of public sector jobs that burden the state budget.

Sultan Qaboos' decision to suspend the price deregulation illustrated how difficult it can be to introduce economic reforms in the Gulf monarchies, since rulers are wary of public discontent even if they have ample power to act.

Last December, Bahrain announced it would raise fuel prices to save on state subsidies, but backed off from implementing that plan after members of parliament protested.

Oman's cabinet has yet to reveal when it plans to discuss consumer protection and anti-monopoly legislation.

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