The decision to keep pump prices unchanged in Niger is now exacting a heavy toll on the nation’s public finances. According to the latest projections from the International Monetary Fund (IMF), the Société Nationale des Pétroles du Niger (SONIDEP) is heading toward a staggering net loss of 28 billion FCFA for the 2026 fiscal year, driven by soaring domestic demand and elevated import costs on the global market.
How Nigeria’s subsidy removal reshaped Niger’s fuel market
The roots of this financial strain extend well beyond Niger’s borders. When Nigerian President Bola Tinubu scrapped gasoline subsidies, a significant portion of demand shifted toward Niger. Nigerien fuel, kept artificially low by the state, became far more appealing than prices across the border, fueling a surge in local consumption and cross-border traffic.
With this influx, the Zinder Refining Company (SORAZ), whose output is capped, could not meet the entire national demand. To prevent shortages, SONIDEP had to turn to massive fuel imports bought at high international prices, only to sell them at a loss within the country.
The full subsidy bill: 42 billion FCFA
To keep pump prices steady and protect household purchasing power, the total subsidy cost linked to imports is estimated at 42 billion FCFA for 2026.
The financial plan to cover this expense directly weakens the national operator:
- 15 billion FCFA will be drawn from SONIDEP’s price stabilization mechanism and fund, depleting its precautionary reserves.
- 28 billion FCFA will close the year as a direct net loss in the state-owned company’s accounts.
Lost revenue for the public treasury
The fallout from this trade-off doesn’t stop at 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 revised 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, authorities are preserving social peace in the short term. But this approach raises questions about the financial sustainability of the main national distributor, now forced to sacrifice profitability and equity to serve as a price shield.
