Angola's Fuel Price Hike Sparks Tension Amid IMF Pressure and Economic Headwinds

Angola, Africa's second-largest oil producer, has sharply increased domestic diesel prices in a bid to phase out costly fuel subsidies and shore up its fragile public finances.

- Joel Costa LUANDA

The decision, prompted by mounting economic pressures and nudging from the International Monetary Fund (IMF), comes at a precarious time for the oil-dependent nation as crude prices remain low and social unrest looms.

The latest increase, announced in early July, raised diesel prices by one-third - from 300 kwanzas to 400 kwanzas per litre - marking the second fuel price adjustment this year. While prices for petrol and liquefied petroleum gas (LPG) remain unchanged for now, the trajectory of subsidy withdrawal appears irreversible.

This move is part of a broader subsidy reform program initiated in 2023, aimed at plugging fiscal holes and reducing reliance on external borrowing. However, the reforms are deeply unpopular. A similar gasoline price hike in mid-2023 sparked deadly nationwide protests, with security forces clashing with demonstrators in Luanda, Benguela, and Namibe. At least five people were killed, prompting President João Lourenço to fire his Economic Coordination Minister and install the Central Bank Governor in his place.

Debt Overhang and IMF Oversight