Niger’s decision to keep pump prices artificially low is now exposing the true fiscal cost of that policy. Fresh projections from the International Monetary Fund indicate that the Société nationale des pétroles du Niger (SONIDEP) is heading toward a net loss of 28 billion FCFA in 2026, squeezed between soaring domestic demand and expensive fuel purchases on international markets.
How Nigeria’s subsidy removal spilled over into Niger
The roots of this financial strain lie outside Niger’s borders. When Nigerian President Bola Tinubu scrapped petrol subsidies, a significant share of demand shifted toward Niger. Fuel in Niger, kept deliberately cheap by the state, became far more attractive than in its giant neighbour, driving up local consumption and intensifying cross-border flows.
With the Zinder refinery (SORAZ) operating at limited capacity, it could not meet the entire national market. To avert shortages, SONIDEP turned to large-scale imports, buying fuel at high international prices and reselling it domestically at a loss.
A combined bill of 42 billion FCFA
To hold pump prices steady and protect household purchasing power, the total 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.
- 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 extends beyond SONIDEP’s balance sheet to the state budget. The government had initially expected 3.3 billion FCFA in dividends from the public company’s performance, but the IMF’s revised projections now bring that direct fiscal revenue down to zero.
By letting SONIDEP absorb the oil shock rather than adjusting pump prices or strictly regulating cross-border flows, the authorities are preserving social calm in the short term. Yet this choice raises questions about the financial sustainability of the country’s main fuel distributor, now forced to sacrifice profitability and equity to act as a price shield.