This post is based on reporting by
Intellinews. Significantly higher international fuel prices, complements of
(depends on who you ask) Iran and Russia (I say), have led to estimates of a
doubling of the cost of fuel subsidies in Angola to $4.16 billion in 2026.
Angola imports over 80% of its refined fuels. It is a major producer of crude
oil, producing about 1.05 MM barrels per day. They report that Angola’s newest
refinery to come online has produced mainly naphtha and fuel oil for export
rather than diesel. Output of diesel was only 14% of total output.
“Angola’s efforts to expand domestic refining have yet
to substantially reduce its import dependence. The new Cabinda refinery
exported about 86% of the refined products covered by its disclosed early sales
data, mainly naphtha and heavy fuel oil, while supplying relatively little
diesel domestically, as IntelliNews reported in September.”
The next phase of the Cabinda
refinery development is expected to add hydrocracking capacity and increase
production of diesel and jet fuel. The
Cabinda refinery is 90% owned by London-based emerging-markets investment group
Gemcorp and 10% by state oil company Sonangol. It currently has the capacity to
process 30,000 barrels of crude per day but is only processing about half of
that. In future phases, it is expected to process 60,000 barrels per day.
Another refinery under
construction is the larger Lobito refinery. It is working on financing from China and
Europe, with Sonangol taking some, and the nearby country of Botswana was in
talks in March to take a stake of about 30% in the project. It is expected to
be completed in July 2027 for phase one operations. It is expected to process
200,000 barrels per day. Plans for an associated petrochemical complex to
produce fertilizer for domestic needs are in the works as well.
As a major oil exporter, Angola is
benefiting from higher oil prices, but its fuel subsidies are growing as well
since it imports so much of its refined fuels.
As in many places, once fuel
subsidies are commonplace, people tend to fight to keep them.
“Angola began gradually withdrawing fuel subsidies in
2023, when a petrol price rise triggered deadly protests, and further increases
remain politically sensitive. Unrest that followed a one-third rise in the
diesel price to AOA400 per litre in July 2025 left 22 people dead, 197 injured
and 1,214 arrested, according to the presidency.”
Below, the country’s Secretary of
State for Finance and the Treasury, Ottoniel dos Santos, stresses the need to
keep fuel subsidy cuts gradual and to diversify its economy away from oil. Oil
and gas derivatives like fertilizer, which could really help the country’s
agricultural sector, are one means of diversification.
“We need to move not only with the subsidies removal,
but also with the diversification of our economy,” dos Santos told Reuters. He
said further price increases would remain gradual, given the risk of economic
and social fallout. The government is also examining more targeted social
assistance as an alternative to broad subsidies.
References:
Angola’s
2026 fuel subsidy bill could hit $4.16bn, more than twice budgeted amount. IntelliNews.
October 19, 2025. Angola’s
2026 fuel subsidy bill could hit $4.16bn, more than twice budgeted amount
Angola's
Cabinda refinery exports 86% of early sales as throughput ramps up. Brian
Kennety. September 9, 2026. bne
IntelliNews - Angola's Cabinda refinery exports 86% of early sales as
throughput ramps up
Angola’s
Lobito refinery 23% complete. Intellinews. January 15, 2026. bne
IntelliNews - Angola’s Lobito refinery 23% complete
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