Energy industry source says Gulf state sets conservative price to help keep growth on track
Qatar is expected to base its state budget for the fiscal year starting in April on an average oil price of $45 per barrel, down from $65 assumed in the current year's budget, a Qatari energy industry source told Reuters on Thursday.
"This year's budget is based on $45 a barrel oil, which is conservative and will help keep growth on track," said the source, who is involved in reviewing aspects of the budget. He declined to be named because the budget has not been announced.
The finance ministry did not respond to a request for comment. In the past, the ministry has not routinely disclosed the oil prices on which it bases its budgets.
A $45 assumption would not necessarily mean Qatar expected that level during the year; the budget oil price is merely an accounting convention used to calculate projected revenues.
In past years, Qatar has often made very conservative assumptions that turned out to be well below the actual oil price.
In the April-June quarter of the current fiscal year, actual state spending fell 6.6 percent from a year ago to 38.8 billion riyals ($10.7 billion) and the government enjoyed an actual surplus of 79.0 billion riyals, according to the latest data.
Since then, however, the price of Brent crude oil has plunged from around $115 a barrel to below $50, putting the finances of the Gulf oil exporters under pressure.
Qatar may be the least affected country in the group; although it is a significant oil producer, its natural gas export revenues are only weakly correlated with oil.
"We don't have a lot of spot sales like Saudi and others do - we deal with long-term contracts, and if the price of oil stays at the same levels we have today, we can cover any deficit for another three to four years," said the source.
In a speech in November, Qatar's emir, Sheikh Tamim bin Hamad al-Thani, said the economy would not be affected by the slide in oil prices because the state budget was based on conservative assumptions.