Media ININ Economy We Trust
Media In / Riyadh 8 May 2018
Al Rajhi Capital revealed its forecast that the current year’s oil revenues will reach Rls 547.5 billion, 11.3% higher than the budgeted revenues of SR492 billion, assuming an average of $ 65 per barrel for April-December 2018, Aramco’s capital spending in the second half.
Al Rajhi Capital said oil revenues increased by only 2% year-on-year to Rls 114 billion from Rls 112 billion in the first quarter of 2017, despite a 16.5% year-on-year increase in crude oil prices (spot prices for West Texas crude oil , Due to the late delivery of one month). This was due to the change in royalty fees and dividends from Aramco, the potential increase in Aramco’s capital expenditure and the government accounting system on a cash basis and not on accrual basis.
The average price of crude oil for the first quarter of 2018 was $ 62.9 per barrel, up 21.9 percent year-on-year, compared to $ 51.6 per barrel in the first quarter of 2017. The average price of oil in April 2018 was about $ 66.2 Per barrel, and now touched $ 70 a barrel in early May
Al Rajhi Capital has maintained that the price of a barrel of oil needed to balance the budget of $ 76 a barrel, which is different from the price of $ 84 a barrel, according to the International Monetary Fund recently, noting that this difference in estimating the price of oil balance can be attributed to estimates Capital expenditure.
According to Al Rajhi Capital, oil revenues, which are expected to exceed expectations, and confirmation that reforms are working to support non-oil revenues, will help the government meet or exceed the target spending levels in the 2018 budget without affecting the budget deficit target, For the first quarter of 2018, which amounted to 34.3 billion riyals, representing only 17.6% of the target deficit for the whole year of 195 billion riyals.
Al Rajhi Capital said non-oil revenues are now more integrated with economic growth, which is the main determinant of growth in tax collection from different sources
