Businesses need to be cautious in their spending

In this context, he said that businesses needed to continue to spend cautiously and wisely, even if oil prices seem like they are going to increase in the future. A drop in oil prices over the past few years has seen companies in Oman tighten their belts and cut back on spending, and Salim Al Aufi recommended that companies should spend in a way that maximises returns on their expenditure in order to protect themselves from the impact of any future fluctuations in oil prices and enabling them to maintain a stable work environment for their employees, irrespective of the external situations.

Undersecretary’s advice

The undersecretary’s advice for companies came when Musallam Al Mandhari, the Chief Executive Officer of the Oman Society for Petroleum Services (OPAL), asked, “The economic downturn of the last four years has been very painful for all OPAL members. Have we seen the end of the downturn? Are we still lean and mean? Or will we see some growth in terms of oil prices soon?”

In response, the undersecretary explained “Whatever efficiency we’ve capitalised on, we need to keep. Whatever financial gains that we have materialised, we need to keep as well. Otherwise, we would be slacking again as soon as oil prices go up and before we know it, the oil prices drop and everybody scrambles again. So let us sustain as much as possible, capitalise on gains, and drive even more in terms of efficiency.”

Fluctuating prices

Ramanuj Venkatesh, a financial analyst based in Oman, said individuals should also needed to be careful in their spending during a time of fluctuating oil and gas prices. He said, “An average consumer should go for conservative or budgeted spending in order to have more reserve funds to buy with when oil prices rebound”.

“Demand and supply govern the oil and gas sector mostly, which is the biggest factor in the fluctuation,” he said.

“Some countries have untapped oil reserves, some wish to be self-sufficient in terms of energy, and some countries, such as Japan, are making big pushes in the field of renewable energy sources and solar energy in particular. All of these affect the price of oil,” he added.