The gradual withdrawal of fuel subsidies over the past three years has enabled the Angolan state to accumulate savings of 900 billion kwanzas. However, spending on subsidies continues to pose a risk to the fiscal anchor established by the Public Finance Sustainability Law, according to Angolan authorities.
In the Explanatory Report of the 2026 State Budget, consulted by Economia & Mercado magazine, the Ministry of Finance (MINFIN) states that the reform of fuel subsidies during this period was carried out in a “more restrained” manner.
Following the increase in the gasoline price from Kz 160 per litre to Kz 300 in 2023, and the rise in the diesel price in 2024 from Kz 135 to Kz 200 per litre, the document recalls that the Executive implemented two additional diesel price hikes in 2025: an increase to Kz 300 per litre in March and a further rise to Kz 400 per litre in July.
In 2024, fuel subsidies amounted to Kz 2.7 trillion (2.6% of GDP), and closing estimates for 2025 indicate that subsidy expenditure could reach Kz 2 trillion (1.7% of GDP). These adjustments resulted in fiscal savings of just under Kz 900 billion.
Nevertheless, the report notes that despite the adjustments made to subsidy spending and the reduction of its share in total fiscal expenditure—from 14% in 2024, with projections pointing to 9% in 2025—fuel subsidies continue to represent a risk factor for the fiscal anchor established by the Public Finance Sustainability Law.
“The non-oil primary deficit is fundamentally a function of the determinants of fuel subsidy expenditure and the capacity to absorb disbursements for the execution of capital spending related to structuring projects across various sectors with an impact on the national economy. As such, the pace of implementation of fuel subsidy reform conditions compliance with the legally established 5% limit for the non-oil primary deficit,” the document states.
Source: Economia & Mercado
