Cost of Living in Oman

Expats will find the cost of living in Oman more reasonable than that of many of the neighbouring Gulf Cooperation Council (GCC) nations, and yet income is still tax free. Prices are highest in the capital of Muscat, but though costs can be less outside of this city, choice is also more limited.
 

According to the 2011 Mercer Cost of Living Survey, Muscat was one of the least expensive destinations in the world; it was ranked 184 out of 214 cities polled, whereas Abu Dhabi and Dubai were 67 and 81, respectively. 
 

Expat packages in Oman for highly-skilled western workers still seems to be generous, and tend to offer good salaries, accommodation, a car, bonuses, flights home and medical insurance. However, as comprehensive as these contracts seem to by, there are always unforeseen costs. Watch out for the added cost of work visas and related health checks - for a family of four this can be about 300 rials. School fees are also a big add-on cost. But the real financial issue in Oman is the relative job insecurity, rather than the pay-packet or the cost of living.
 

Contrary to many of its nearby oil-rich counterparts, Oman does not draw on expats from abroad to comprise its primary workforce. Instead, it looks to locals to occupy most middle management positions, some senior management positions and even many low-paying jobs:  fishermen, taxi-drivers, shop-keepers, bank-clerks. Expats tend to work in senior positions as directors or in sectors where there are skill shortages, such as in the healthcare and education fields.  
 

Even then though, most contracts are for three years, and if an Omani can fill a post, the contract will be terminated. Expats also tend to encounter considerable uncertainty towards the end of a contract.  The government’s pointed Omanisation programme, which aims to educate and train local people for the senior positions that are traditionally held by expats, has put the authorities under increased pressure to speed up the process of filling the posts with Omanis. Thus contract renewal is not a given, and a major cost of living in Oman is the fact that you might be out of a job in a short amount of time. 
 

There are also a number of low income, low productivity expat jobs – maids, gardeners, builders - typically filled by Asian labourers.
 

In the years just before 2012, the cost of housing in Oman was at a premium. The market has eased considerably since then, and now accommodation prices are coming down – like elsewhere in the Middle East. There are a lot of new homes being built, and expats will be able to find a place that fits their budget, mood and style.  
 

Costs vary according to size, facilities and area.  Utilities, such as water, gas and electricity, are generally excluded in the quoted rental price, accommodation is normally unfurnished.
 

Rent in Oman is paid annually in advance, rather than monthly. This is a huge lump sum; although, expats can normally get a loan from their employer. Do note, if you leave before the year is out, the money is not refundable.

Type of Accommodation Monthly Rent (USD)
1-bedroom apartment	350 to 600
2-bedroom apartment	450 to 700
3-bedroom apartment	600 to 1,500
2/3-bedroom villa/town house	650 to 1,500 (very few available)
4+-bedroom villa	1,000 to 5000+

 

The cost of using a car in Oman is much cheaper than doing the same in Europe. As a result, virtually every expat drives, few use public transportation. Car hire is roughly 165 rials a month for a medium-sized vehicle; petrol is very cheap – seven rials for a full tank; and insurance for a small car for multiple drivers is about 250 rials a month.
 

It’s also possible to hire a car with a driver in Oman.  
 

Taxis are good value too, unfortunately though, they rarely have a metre.  Drivers sometimes quote close to the real price, but more often the prices can be incredibly far-fetched.
 

►Tip: It is seven rials from the airport to travel roughly twenty to twenty five kilometres.
 

For those who want to make every penny count, those who don’t have a car or those who want to experience local atmosphere, there are ‘baisa’ buses operating throughout Muscat. This mode of transit is largely used by the lowest paid workers.
 

Similarly, coaches can be a good way of travelling long distance, such as journeys to Sohar, Dubai and Abu Dhabi. 
 

European expats will find the cost of food and drink in Oman cheaper, while Americans may find it more expensive. Regardless though, if you are willing to consume local products, you will save money.  Lulu is the best value supermarket, and Al Fair is the most expensive - but has highest quality and Carrefour is mid-range. 
 

Buying alcohol in Oman can be complicated and costly. As it’s a Muslim country, licenses are required to buy booze from an off-license shop, and the price of this piece of paperwork is set according to how much you intend to buy each month. Furthermore, your employer has to provide permission, and the quantity of alcohol you are allowed to purchase is related to your salary (maximum you can spend on alcohol is 10 percent of your annual salary). 
 

The off-licence alcohol costs about  25 to 30 percent less than the alcohol you’d buy in a bar; anticipate spending  6 to 7 rials for a bottle of spirits, 300 rials for a bottle of beer and  2.5 to 3 rials for a bottle of wine.
 

Eating out can be costly, and if you want a drink, you are forced to frequent expensive Western-style hotels.  The price of wine can be as high as ten pounds a glass. Luckily, there are a number of discount arrangements which means expats rarely pay full price (unless you leave the vouchers and discount cards on the kitchen table!).
 

If you don’t mind foregoing the booze though, there is also a wide range of independent ‘dry’ establishments, where the food is excellent and reasonably priced.  Expats should note that there is a twenty percent tax on the bill in Oman.
 

Sadly tourist activities are highly overpriced. It’s 150 rials a day for a vehicle plus five rials for additional passengers.  On the flip side though, beach activities are next to nothing. Whether you choose to go snorkelling, settle into a sunset cruise or to go and see dolphins, boat trips are roughly 15 to25 rials. The boats are well maintained and the crew knowledgeable.
 

Other entertainment is not costly. Cinema tickets are 1.5 rials. Beaches and parks are free. The newly opened Royal Opera House is a must-see. Ticket prices are around 30 rials for the best seats, and the performances are internationally competitive.
 

Most companies offer health insurance to the family as part of the employment package. However, there are often exclusions, such as mental health and dentistry, and some insurance policies do not provide coverage for the health centres expats prefer, such as Muscat Private Hospital and Medident. This means most people end up paying some health costs irrespective of insurance. These can add up terrifyingly quickly.  
 

Consultations are around 10 to 30 rials, depending on seniority and the nature of the specialist.
 

A minor operation, such as having wisdom teeth out, costs about 1,100 rials.
 

The cost of schooling is a huge expense if the company does not pay – especially if you have several children. There is no free education for expats in Oman, and most schools demand that fees are paid prior to the first day of the tem. 

Nursery school costs roughly 3,000 rials a year, and tuition costs can rise to 7,000 rials for children over sixteen years old. Some institutions require expats pay a refundable deposit.