Oman to shield consumers by subsidising food imports

• State to step in for six months
• Royal directive targets logistics
• Iran war hiked prices of staples

Oman will subsidise half of the transport and insurance costs for food imports over the next six months, aiming to strengthen security of supply and shield consumers from higher prices as a result of the Iran war.

State-run shipping company Asyad Group said in a bourse disclosure it had received a royal directive from Omani ruler Sultan Haitham regarding the import subsidies. The directive applies to all logistic companies bringing food into the country.

Oman’s inflation rate rose to 3.8 percent in May, with food and non-alcoholic beverage prices gaining 6.6 percent, according to the Oman Observer, citing data from the National Centre for Statistics and Information. Vegetable prices rose 25 percent year on year during the month, while fruit rose 17 percent and meat by 5 percent.

“It will make food shopping cheaper with the newly implemented transport subsidy. The war pushed up prices of basic foods like rice, flour and sugar,” Hamed Al Hashmi, chief corporate support officer at Oman Food Capital, told AGBI.

Oman is building a $4.2 billion agricultural city in the north of the country as part of a wider food security strategy.

• Oman has gained from Iran war but risks persist, says IMF
• Oman starts work on agricultural city with focus on food security
• Omani fund allocates $1.5bn for priority sectors

The sultanate aims to reduce reliance on imports, strengthen domestic production and shield itself from shocks linked to regional conflict and volatile global markets.

Consumers welcomed the news, saying it would help reduce their shopping bills.

“It is a good gesture by the sultan of Oman because our food budgets had been stretched since the war started,” Said Al Kassabi, an Omani supermarket shopper, told AGBI.