Oman says it expects its budget deficit to double this year because of falling income from oil.

However, it is raising taxes and customs duties by up to fifteen per cent to offset the shrinking oil revenues.

The Omani Finance Minister, Ahmad Abdul-Nabi Makki, said the 1999 budget was based on a price of nine dollars a barrel for oil -- which he said was unlikely to rise in the next two years.

Oman, like other nations heavily dependent on oil revenue, has been hard hit by plunging oil prices -- now at their lowest for twenty-five years.

In the last week, Kuwait, Saudi Arabia and Iran have all announced larger budget deficits or austerity measures.