Fuel subsidy review under discussion

Gabon is considering revising its fuel subsidy system to better target aid to vulnerable populations, according to Ismaël Gnamalengoungou Oligui, director general of the Caisse de stabilisation et de péréquation (CAISTAB). The government has allocated 147 billion FCFA (approximately 252 million dollars) to fuel subsidies between January and September 2026.

President raises cost concerns

The debate on the cost of subsidies was raised by President Brice Clotaire Oligui Nguema during the Council of Ministers meeting on October 8, where he asked the government to study ways to reduce or eliminate this burden. Public support for fuel prices cost 30 billion FCFA (approximately 51.4 million dollars) in September.

Subsidy costs have grown

Before the war in Ukraine, this burden varied between 7 and 9 billion FCFA (12 to 15.4 million dollars) per month. According to the World Bank's public finance review of Gabon published in September, fuel subsidies represented 1% of GDP in 2024, with an estimate that 96% of the cost of subsidies for gasoline and diesel benefited the wealthier half of the population.

Fuel prices remain below costs

Pump prices for gasoline remain below estimated fuel costs, with a liter of gasoline sold for 595 FCFA (approximately 1.02 dollar) against an estimated cost of 970 FCFA (1.66 dollar). For diesel, the price at the pump reaches 575 FCFA (approximately 0.98 dollar), while the actual cost is estimated at 1190 FCFA (2.04 dollars).

Stabilization mechanism in place

The stabilization mechanism covers part of this gap to contain the prices paid by consumers. Ismaël Gnamalengoungou Oligui defended the current mechanism, noting that aid also indirectly benefits households through transport and electricity production.

Proposed targeted aid

He proposed studying more targeted aid for vulnerable populations, including digitalization to differentiate levels of support according to income or consumption capacity.