Angola’s Fuel Subsidy Bill Could Nearly Double to $4.16 Billion in 2026
Angola could spend as much as 3.8 trillion kwanzas ($4.16 billion) on fuel subsidies in 2026, nearly twice its initial budget projection, as rising international energy prices increase the cost of keeping domestic fuel prices low.
Ottoniel dos Santos, Angola’s Secretary of State for Finance and the Treasury, disclosed the revised estimate in an interview with Reuters on Friday, October 16, on the sidelines of the International Monetary Fund and World Bank annual meetings in Bangkok, Thailand.
The government initially budgeted less than 2 trillion kwanzas for fuel subsidies. The latest projection reflects mounting pressure on public finances as global energy prices rise amid the ongoing conflict in the Middle East.
Angola, one of Africa’s major oil producers, began gradually reducing fuel subsidies in 2023. However, authorities have been cautious about accelerating the process because higher pump prices could increase transport and living costs, particularly for lower-income households.
“We need to move not only with the subsidies removal, but also with the diversification of our economy,” dos Santos said, stressing the need to reduce dependence on oil revenues.
The government now expects oil prices to average about $90 per barrel by the end of 2026, significantly above the $61 benchmark used in its budget. Higher international prices have increased the cost of maintaining domestic fuel subsidies.
Angola is also preparing its 2027 budget, with the government considering how to manage spending, borrowing requirements and economic diversification. Officials have indicated that the next phase of subsidy reform will depend partly on the potential impact on vulnerable households.
The rising bill highlights a dilemma facing oil-producing economies: although higher crude prices can boost export earnings, they can also make fuel subsidies more expensive when governments shield consumers from increases in global prices.
For Angola, the challenge is to reduce the fiscal burden of subsidies without imposing sudden price increases that could intensify economic hardship.
