Angola's fuel subsidy expenditure for 2026 is now projected at approximately $4.16 billion, nearly double initial estimates, as elevated global energy prices increase the cost of maintaining low domestic fuel prices. Senior finance official Ottoniel dos Santos outlined a cautious approach to subsidy removal, alongside plans to diversify the economy and open Angola's domestic bond market to foreign investors.
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Projections shared by a finance ministry official in a Friday broadcast interview put Angola's fuel subsidy bill on a path toward 3.8 trillion kwanzas — equivalent to roughly $4.16 billion — by 2026, a figure that would represent nearly double the initial ceiling of under 2 trillion kwanzas.
Budgetary pressure on the petroleum-exporting country has mounted alongside elevated energy costs tied to the regional conflict, which have made subsidising domestic fuel prices a more expensive undertaking for the government. Growing fiscal pressure has pushed authorities to weigh how quickly they can scale back the subsidy programme that has been winding down since 2023.
Ottoniel dos Santos, Angola's secretary of state for finance and the treasury, told a broadcaster on the sidelines of the International Monetary Fund and World Bank annual meetings in Bangkok that the pace of reform needed to be balanced against potential economic and social consequences. Dos Santos stated that subsidy reduction had to advance alongside broader efforts to diversify the economy, describing the current approach as deliberate and measured, and noting that any opening allowing for a faster timetable — particularly if the effect on lower-income households proved less than projected — would make accelerated implementation more viable.
Angola now places average oil prices at around $90 per barrel through to year-end, a figure above the $61 reference price built into the 2026 budget. With the 2027 budget still unsubmitted ahead of its month-end deadline, dos Santos indicated that the oil price assumption underpinning the plan would sit close to the International Monetary Fund's projection of $71.50 per barrel. Projected output for 2027 sits at 1.045 million barrels per day, a figure that would leave daily crude volumes essentially unchanged from where they stand now.
Angola's $4 billion Eurobond issuance, alongside other liability management operations, has addressed the bulk of the country's borrowing requirements for the current year, dos Santos indicated, with any further bond sales or external financing decisions tied to the 2027 budget cycle. Dos Santos noted that whether a return to international markets would be warranted depends on what funding gaps that budget reveals, while the country simultaneously works to widen access to its domestic government bond market for overseas investors.
Angola's debt market is being opened to buyers from every region and country, dos Santos said, while acknowledging that some potential investors hold mistaken assumptions about capital account restrictions — specifically, the belief that exiting positions once entered would prove difficult. Dos Santos stressed that the country is actively working to draw in outside capital by making the domestic market more accessible to international participants, with the exchange rate standing at 913 kwanzas to the dollar.