Niger’s fuel subsidy burden pushes SONIDEP toward 28 billion FCFA loss in 2026

Niger’s decision to keep pump prices frozen is now exacting a heavy toll on the country’s public finances. Fresh projections from the International Monetary Fund (IMF) show that the Société nationale des pétroles du Niger (SONIDEP) is heading for a net loss of 28 billion FCFA in the 2026 fiscal year, squeezed between soaring domestic demand and expensive imports on the global market.

The ripple effects of Nigeria’s fuel reforms

The roots of this financial strain lie beyond Niger’s borders. When Nigerian President Bola Tinubu scrapped petrol subsidies, a significant share of demand shifted toward Niger. Fuel in Niger, kept artificially cheap by the state, became far more attractive than in its larger neighbour, driving up local consumption and intensifying cross-border flows.

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

A total bill of 42 billion FCFA

To hold pump prices steady and protect household purchasing power, the overall cost of import-related subsidies is estimated at 42 billion FCFA for 2026.

The financial plan to absorb this bill 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 does not stop at SONIDEP’s balance sheet; it also hits the state budget. While the government initially expected to collect 3.3 billion FCFA in dividends from the public company’s performance, the IMF’s new projections bring that direct tax revenue down to zero.

By choosing to let SONIDEP absorb the oil shock rather than revise pump prices or strictly regulate 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.