Niger’s decision to hold fuel prices steady at the pump is now exacting a heavy toll on the nation’s public finances. Fresh projections from the International Monetary Fund (IMF) indicate that the Société nationale des pétroles du Niger (SONIDEP) is heading toward a staggering net loss of 28 billion FCFA in the 2026 fiscal year, driven by soaring domestic demand and costly imports on the global market.
How Nigeria’s subsidy removal reshaped Niger’s fuel market
The roots of this financial strain stretch well 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 appealing than in its larger neighbour, fueling both higher local consumption and a surge in cross-border traffic.
Confronted with this influx, the Zinder refinery (SORAZ), whose output is capped, could not meet the entire national market. To avert shortages, SONIDEP turned to large-scale imports of fuel purchased at premium prices on international markets—only to sell it domestically at a loss.
A total subsidy bill of 42 billion FCFA
To keep pump prices unchanged and protect household purchasing power, the overall cost of import-related subsidies is estimated at 42 billion FCFA for 2026.
The financial plan devised to cover this bill directly weakens the national operator:
- 15 billion FCFA will be drawn from SONIDEP’s price stabilisation mechanism and fund, depleting 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—it also hits the state budget. While the government had initially expected 3.3 billion FCFA in dividends from the public company’s performance, the IMF’s updated 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. Yet this approach raises serious questions about the financial sustainability of the main national distributor, now forced to sacrifice its profitability and equity to act as a price shield.
