A Case Study on Budgetary Control Application in the Ministry of Interior, UAE

Oil prices have been on a roller-coaster ride over the last few years. This thesis examines the evaluation of budgetary control due to fluctuation of petroleum price. During the past 5 years, production of crude petroleum had been increasing steadily in the UAE. In 2014, ADNOC produced crude petroleum from onshore fields, including the Murban field, and from offshore fields, including the Lower Zakum, the Umm Shaif, and the Upper Zakum fields. The country used enhanced oil recovery (EOR) technologies to extract crude petroleum and natural gas from many of its oil-producing wells. The specific research objectives conducted in this study are to investigate effects on budget during petroleum price fluctuation and other objectives are, to examine impact of fiscal policy of UAE on the budget of UAE, to investigate effects of petroleum production on the budget of UAE and to investigate effects of OPEC regulation on petroleum production. The study was conducted in the ministry of interior, United Arab Emirates to undermine the evaluation of the budgetary control due to the fluctuation of petroleum price. Since the main source of revenue for the Government is petroleum so, the public sector budgets heavily depends on the global petroleum price and the fluctuation of it has a direct impact on the public sector operation. Ministry of interior being the key public sector is also within the strategic concern of the government revenue and its implication on its budgetary affairs. Based on the findings of the study the main recommendations made for the study are firstly, it is very common phenomenon for the oil price to fluctuate, hence alternative source of income to be generated so that dependency only from oil price for budget for the ministry of interior can be minimized. Secondly, to introduce new elements in the fiscal policy of the country as alternate source of government revenue likes looking into public revenue and expenses. Concentration on invisible exports to be considered. Like tourism, education, health care etc. Thirdly, reform of OPEC policy’s on petroleum production per day quota need to be relooked due to persistent fall of the oil price as to adjust the supply and demand. The contribution from the researcher there is not cost elimination but there is an in built process now for cost minimization. Secondly, impact of the fiscal policy has a direct impact on the budget. As fiscal policy consist of taxation and government expenditure, so the government now should look for alternate indirect tax to increase the inflow for the government as a measure to reduce the negative burden on petroleum price fluctuations.