Angola's 2026 fuel subsidy bill may swell to $4.16 billion, far exceeding budget

Angola's finance ministry projects that fuel subsidies for 2026 could climb to AOA3.8 trillion ($4.16 bn), more than twice the AOA1.7 trillion originally budgeted. Ottoniel dos Santos attributed the surge to rising international energy prices, driven by Middle-East tensions, and to the country's heavy reliance on imported refined products, which account for over 80% of consumption. Subsidy outlays already reached AOA1.7 trillion in the first half of the year, a 56% increase over the same period last year.

While Angola has begun building the Cabinda and Lobito refineries, the former mainly exports its output and the latter is only 23% complete, leaving import dependence largely unchanged. S&P Global Ratings warned that the expanding subsidy bill could strain public finances ahead of the 2027 elections, and Capital Economics noted that falling oil prices could further expose fiscal vulnerabilities. The government is considering more targeted social assistance as it prepares the 2027 budget.