Niger’s fuel subsidy burden: SONIDEP faces 28 billion FCFA loss in 2026

Niger’s decision to keep pump prices artificially low is now exacting a heavy toll on state finances. Fresh projections from the International Monetary Fund (IMF) indicate that the Société nationale des pétroles du Niger (SONIDEP) is heading toward a net loss of 28 billion FCFA in the 2026 fiscal year, driven by soaring domestic demand and costly imports on the global market.

The unintended spillover of Nigeria’s fuel reforms

The roots of this financial strain lie beyond Niger’s borders. When Nigerian President Bola Tinubu scrapped gasoline subsidies, a significant slice of demand shifted toward Niger. Fuel in Niger, kept artificially cheap by the state, became far more attractive than in its giant neighbour, fuelling both higher local consumption and intensified cross-border flows.

Faced with this surge, the Zinder refinery (SORAZ), whose output is capped, could not meet the entire national market. To avert shortages, SONIDEP had to resort to massive imports of fuel purchased at high international prices, only to resell it at a loss domestically.

A total bill of 42 billion FCFA

To hold pump prices steady and protect household purchasing power, the overall subsidy bill linked to imports is estimated at 42 billion FCFA for 2026.

The financial plan to absorb this cost directly weakens the national operator:

• 15 billion FCFA will be drawn from SONIDEP’s price stabilisation mechanism and fund, draining its precautionary reserves.
• The remaining 28 billion FCFA will close the year as a direct net loss in the state company’s accounts.

Lost revenue for the public treasury

The fallout from this trade-off extends beyond SONIDEP’s balance sheet to the state budget. While the government had initially expected 3.3 billion FCFA in dividends from the public company’s performance, the IMF’s revised projections now bring that direct tax revenue down to zero.

By choosing to let SONIDEP absorb the oil shock rather than adjusting pump prices or strictly regulating cross-border flows, the authorities are preserving social peace in the short term. But this choice raises questions about the financial sustainability of the main national distributor, now forced to sacrifice its profitability and equity to serve as a price shield.