The Togolese government is preparing to reduce its fuel subsidy budget by more than 40% in 2026, from approximately 25 billion CFA francs in 2025 to 14.2 billion CFA francs, according to projections in the budget law. This budgetary shift marks a turning point in the management of energy subsidies, in a context of significant constraints on public finances and reform pressure from technical and financial partners, particularly the IMF.
A Marked Reduction in Fuel Subsidies
Subsidies on petroleum products – unleaded gasoline, diesel, kerosene, and two-stroke oil – will remain in place, but with a considerably reduced budget. These subsidies help maintain administered prices below theoretical international market levels, thus mitigating the impact of global price fluctuations for households and economic actors. In December 2024, pump prices were set at 695 FCFA per liter for diesel, 680 FCFA for premium gasoline, 769 FCFA for two-stroke oil, and 650 FCFA for kerosene.
With a budget reduced to 14.2 billion FCFA, the government is signaling a gradual streamlining of widespread fuel subsidies.
Domestic gas is also affected
Alongside petroleum products, the government plans to reduce the budget allocated to domestic gas, while maintaining what it considers “substantial” support. The budget allocated to butane gas will thus decrease from 9.6 billion FCFA in 2025 to approximately 8.7–8.75 billion FCFA in 2026.
- A kilogram of gas is currently sold for 790 FCFA, compared to an “economic price” of 892 FCFA, with the government subsidizing 102 FCFA per kilogram.
- Butane gas is central to domestic energy policy, both to ease the burden on household budgets and to combat deforestation linked to firewood production.
The pressure of reforms and the role of the IMF
Although the government has not provided detailed explanations for this reduction, it comes at a time when the IMF and other donors have been advocating for several years for an overhaul of energy subsidies. These institutions argue that widespread subsidies disproportionately benefit wealthier households and place a heavy burden on public finances.
- The doctrine advocated by the partners consists of gradually redirecting subsidies towards more targeted mechanisms, such as direct cash transfers to vulnerable households.
- The trajectory chosen for 2026 resembles a gradual approach that avoids a social “shock,” particularly the budgetary burden of these measures.
What are the impacts on purchasing power?
In the short term, the decrease in the overall subsidy budget raises the prospect of possible adjustments to fuel and gas prices, or reduced amortization in the event of a new surge in international prices. In the context of sustainable living, the central issue is protecting the most vulnerable households from energy costs, which influence all prices (transport, food, services).
Too rapid a reduction in subsidies without well-targeted compensatory measures could reignite social tensions and affect domestic consumption. Conversely, better-designed targeting (social transfers, subsidies targeted at specific categories or volumes) could preserve the purchasing power of the poorest while freeing up budgetary resources.
Between Budgetary Sustainability and Social Acceptability
For the Togolese government, the challenge is to find a balance between the budgetary sustainability and social acceptability of the reform. The reduction of more than 40% in fuel subsidies and the moderate decrease in the butane gas subsidy reflect a desire to adjust spending without completely relinquishing the state’s role as a buffer.
- In the medium term, the success of this strategy will depend on the ability to implement transparent, targeted mechanisms, strengthen social safety nets, and communicate clearly on the reform’s objectives.
- In a country where energy costs remain a key determinant of the cost of living, the debate on subsidies is not limited to an accounting issue: it directly impacts the social contract between the state and its citizens.
