Oman is collecting more from oil and gas just as food and transport costs climb, giving the government more room to invest while making the cost of doing business harder to ignore. 

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Oman is collecting more money from its oil and gas sector, but the extra revenue is arriving as some of the basic costs of running the economy are moving higher. Food and transport prices have climbed sharply, putting pressure on households and businesses at the same time that stronger energy income is giving the government more room to spend and invest. Public revenues rose 13% in the first half of 2026, while inflation reached 3.2% in July. The two developments tell a more complicated story when placed alongside each other. Oman has greater fiscal room, but some of that additional revenue is arriving as the cost of operating the economy rises. 

Food is where the pressure is most visible, prices for food and non-alcoholic beverages rose 7.3% in July from a year earlier, with vegetables up 19.9% and fruit prices 15.8% higher. Transport costs rose 6.5%. For households, the increases are showing up in everyday spending, while businesses are dealing with the same pressures through suppliers, deliveries and operating expenses. Restaurants, retailers and logistics companies are particularly exposed because higher food and transportation costs can reach them from several directions at once. 

Stronger government revenue gives Muscat room to support its investment plans even as those costs rise. Public expenditure reached OMR 6.62 billion by the end of June, compared with OMR 6.60 billion in revenue, according to the Ministry of Finance's latest fiscal bulletin. Development spending by ministries and civil units had reached OMR 798 million, including OMR 146 million for economic transformation projects. Oman is still trying to use periods of stronger oil and gas income to build activity beyond hydrocarbons, and the cost of delivering those projects is becoming part of that equation. Higher transportation, supplies and other operating costs can make the same investment more expensive to deliver, even when the government has more money available. 

For the private sector, the effect is likely to be felt less through the headline inflation number and more through margins and investment decisions. A company that depends on imported goods or regular transportation is facing a different environment from one whose costs are less exposed to those increases. The latest figures also show that inflation is not spreading evenly across the economy. Housing, water, electricity, gas and other fuels fell 0.6% in July from a year earlier, while food and transport recorded some of the largest increases. That leaves the pressure concentrated in parts of the economy that can quickly affect businesses and supply chains. Stronger oil and gas revenue gives Muscat some room to absorb those pressures without putting its broader economic plans on hold. That leaves the way the money is used increasingly important for businesses, particularly in logistics, infrastructure, domestic production and productivity. Improvements in these areas could make it cheaper to move goods, source supplies and serve customers, giving companies some relief from the higher costs now moving through the economy. 

Oman has gained fiscal room at a time when parts of its economy are becoming more expensive. The latest figures put a sharper focus on whether that advantage can be turned into greater productive capacity rather than simply covering higher costs. For a country trying to build a more diversified economy, stronger oil and gas revenues will matter most if they help businesses expand their capacity and operate more efficiently. 

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