Niger’s fuel subsidy gamble: SONIDEP faces 28 billion FCFA loss by 2026

Niger’s decision to keep pump prices artificially low is now exposing the true scale of its fiscal burden. Fresh projections from the International Monetary Fund (IMF) show 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.

The unintended ripple effect of Nigeria’s fuel reforms

The roots of this financial strain stretch 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 giant neighbour, fueling both higher local consumption and a surge in cross-border flows.

Faced with this influx, the Zinder refinery (SORAZ), whose output is capped, could not meet the entire national market. To avert shortages, SONIDEP had to resort to massive imports of fuel bought at high international prices—then resold 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.
• 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 initially expected 3.3 billion FCFA in dividends from the public company’s performance, the IMF’s new projections cut that direct tax revenue to zero.

By choosing to let SONIDEP absorb the oil shock rather than revising pump prices or strictly regulating cross-border flows, 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 profitability and equity to serve as a price shield.