Angola’s fuel subsidy bill could more than double to AOA3.8 trillion ($4.16bn) in 2026 as higher international energy prices increase the cost of keeping domestic fuel prices low.
Secretary of State for Finance and the Treasury Ottoniel dos Santos said on October 16 that spending was projected at AOA3.7 trillion–AOA3.8 trillion, against an original budget allocation of AOA1.7 trillion ($1.86bn), according to Reuters and Portuguese news agency Lusa. The additional AOA2.1 trillion is equivalent to about 6% of the AOA33.2 trillion 2026 budget.
Angola relies on imports for more than 80% of the refined fuel it consumes, according to the downstream regulator, the Institute for the Regulation of Petroleum Derivatives (IRDP), exposing its subsidy programme to international fuel prices despite its substantial crude exports. Subsidies reached nearly AOA1.7 trillion in the first half of 2026, up 56% from a year earlier and close to the original full-year allocation, according to Finance Ministry data reported by Expansão.
Angola spent AOA1.54 trillion on oil, fuel and gas imports in the first half of 2026, AOA499bn more than a year earlier, Expansão reported, citing foreign trade data.
Angola’s efforts to expand domestic refining have yet to substantially reduce its import dependence. The new Cabinda refinery exported about 86% of the refined products covered by its disclosed early sales data, mainly naphtha and heavy fuel oil, while supplying relatively little diesel domestically, as IntelliNews reported in September.
The 200,000 bpd Lobito refinery, Angola’s largest planned plant, was 23% complete in January and is expected to be finished in July 2027, as IntelliNews reported. Botswana was in talks in March to take a stake of about 30% in the project, IntelliNews reported.
Speaking during the International Monetary Fund (IMF) and World Bank annual meetings in Bangkok, Thailand, dos Santos attributed the rising subsidy bill to higher global energy prices driven by the conflict in the Middle East.
Angola now expects oil prices to average around $90 per barrel in 2026, compared with the $61 assumption used in its original budget. Higher prices support the country’s crude export earnings but also increase the cost of subsidising imported refined fuels.
S&P Global Ratings, which affirmed Angola at B- in August, said fiscal performance remained vulnerable to higher fuel-subsidy spending in 2026 and to increased expenditure ahead of the 2027 elections.
Capital Economics warned in September that Angola’s reliance on higher oil revenues to sustain spending, including fuel subsidies, could leave its public finances exposed when crude prices fall. The consultancy forecast economic growth slowing from 6.8% in 2026 to 3.5% in 2027 as the oil windfall diminished.
Angola began gradually withdrawing fuel subsidies in 2023, when a petrol price rise triggered deadly protests, and further increases remain politically sensitive. Unrest that followed a one-third rise in the diesel price to AOA400 per litre in July 2025 left 22 people dead, 197 injured and 1,214 arrested, according to the presidency.
The IMF estimates that fuel-subsidy spending fell to about 1.6% of GDP in 2025 from 3.8% in 2022 following several rounds of price increases, although diesel prices remained well below international levels at the end of 2025.
“We need to move not only with the subsidies removal, but also with the diversification of our economy,” dos Santos told Reuters. He said further price increases would remain gradual, given the risk of economic and social fallout. The government is also examining more targeted social assistance as an alternative to broad subsidies.
Angola is preparing its 2027 budget for submission by the end of October. Dos Santos said its oil-price assumption would be close to the IMF’s forecast of $71.50 per barrel for Brent crude, while production was projected at 1.045mn barrels per day (bpd), broadly unchanged from 2026.
Dos Santos said $4bn raised through Eurobond issuances in March and May, alongside debt-management operations, had covered most of Angola’s 2026 financing needs. The March sale raised $2.5bn against demand of about $5.2bn, while the $1.5bn May deal was combined with buybacks of outstanding Eurobonds, according to the Finance Ministry. Decisions on further borrowing will depend on the 2027 budget, while the government is seeking to attract foreign investors to its domestic bond market.
See IntelliNews: S&P affirms Angola at B- as high oil prices offset fiscal and debt risks
See IntelliNews: Angola delivers third straight rate cut as inflation eases to 11-year low of 8.78%
See IntelliNews: Angola’s Cabinda refinery exports 86% of early sales as throughput ramps up
See IntelliNews: Botswana in talks to take 30% stake in Angola’s $6.6bn Lobito oil refinery
See IntelliNews: Angola’s Lobito refinery 23% complete