The price of dependence : Tunisia and the 2026 energy shock

Tunisia's first vulnerability is fiscal. The rise in oil prices simultaneously strikes the three centers of gravity of the Tunisian economy: public finances, the external balance, and purchasing power.³ This diagnosis is central. Tunisia is not only exposed because it imports energy; it is exposed because this energy dependence is embedded in a rigid fiscal system, heavily constrained by debt, subsidies, and weak growth.

The 2026 budget was built on the assumption of Brent at 63.3 dollars per barrel. Yet as soon as prices approach 80, 90, or 100 dollars, the gap becomes politically and financially explosive. Available data indicate that one additional dollar above the reference price adds approximately 164 million dinars in energy subsidy expenditure.⁴ In a scenario where the average barrel reaches around 78 dollars, the additional cost could already be measured in billions of dinars; at 86 dollars, the energy compensation bill would grow even heavier. In a severe crisis scenario, with prices durably above 100 or 120 dollars, energy compensation would cease to be just one budget line among others and become a central political constraint.

This fragility is aggravated by the suspension, since November 2020, of the automatic adjustment mechanism for fuel prices. This choice temporarily protects households from a brutal rise at the pump, but transfers the burden to the State. If the State absorbs the shock, the deficit widens; if it passes it through, inflation and social discontent rise. Tunisia thus finds itself caught in a scissors effect: preserving social peace deteriorates public finances, while preserving the budget risks increasing social pressure.

The oil crisis thus reveals a planning weakness. The problem is not only that the barrel rises; it is that Tunisia's fiscal framework remains often based on optimistic assumptions. The country rediscovers its vulnerability with each shock, even though this vulnerability is structural.

The rise in oil prices never remains confined to the energy sector. It diffuses through fuels, road transport, freight, logistics costs, agricultural inputs, food prices, and industrial production costs. Even if the State does not immediately pass the full increase to the pump, inflation eventually transmits through other channels: imported products, transport, packaging, energy consumed by businesses, agricultural costs.

This is where the energy crisis becomes social. Tunisia is already going through a sequence of visible impoverishment, marked by the high cost of living, the deterioration of urban services, the weakening of intermediate institutions, and a form of social inertia. The energy shock can intensify this dynamic. Households, already constrained, suffer from food inflation; businesses see their margins shrink; the State finds itself required to support consumers, public enterprises, and macroeconomic balances simultaneously.

The political context reinforces this vulnerability. The absence of genuine social dialogue mechanisms, the sidelining of the Tunisian General Labour Union (UGTT) from public negotiation, the weakening of municipalities, the freezing or marginalization of intermediary structures, and the shrinking of civil society limit the system's capacity to absorb tensions. In previous decades, formal and informal institutions played a cushioning role. Today, the channels of mediation are weaker. A price crisis can therefore become more difficult to contain, even if society appears momentarily resigned.⁵

The former CEO of an oil company in Tunisia shifts the analysis beyond crude oil itself.⁶ He rightly recalls that the Strait of Hormuz is not only an oil corridor; it is also a chokepoint for some of the derivatives, inputs, and intermediate products that are essential to the global economy. Once it is threatened, it is not only oil cargoes that become more expensive; it is insurance, transport delays, petrochemical flows, fertilizers, plastics, and certain industrial components that come under strain.

For Tunisia, this dimension is crucial. The country imports energy, but also derived products that are essential to the functioning of its productive apparatus. Plastic packaging, for example, is not a secondary sector. It conditions agro-industry, export logistics, distribution, processed food products, and part of manufacturing. If plastics, resins, or petrochemical derivatives become more expensive or less available, Tunisian competitiveness deteriorates.

The same logic applies to fertilizers. Rising urea and ammonia prices can translate into reduced access to inputs at the crucial moment of the agricultural season. In that case, the energy shock turns into an agricultural shock: lower yields, reduced local production, greater import needs, food inflation, and increased pressure on foreign currency reserves. The challenge is therefore to think energy, petrochemicals, agriculture, food security, and industry together.

Gas is the second pillar of Tunisia's energy vulnerability. Tunisia depends heavily on natural gas for its electricity production, and a significant share of this supply is linked to Algeria. This dependence is not only commercial; it is geopolitical. It concerns sovereignty, negotiation margins, and the country's ability to play a role in regional infrastructure.

The TransMed pipeline, which connects Algeria to Italy by crossing Tunisia and then the Sicily Channel, could have made Tunisia a transit energy player in its own right. The TransMed system links the Hassi R'Mel fields to the Italian network through Tunisia; its capacity is on the order of more than 30 billion cubic meters per year according to available sources.⁷ Historically, Tunisia receives royalties tied to the passage of gas. But it has not really capitalized on this geographical position to become a gas or energy hub. It receives, consumes, collects a royalty, but has neither significant storage capacity, nor a resale capacity, nor an industrial strategy articulated around its passage role.

It is in this context that the Algeria–Sardinia–Italy gas pipeline (GALSI) project must be read, designed to directly link Algeria to Sardinia and then Italy, bypassing Tunisia. The project is today considered dormant or abandoned, with no final investment decision. Its planned capacity is significantly lower than that of TransMed, around 8 billion cubic meters per year according to Global Energy Monitor.⁸ But its very existence is politically significant. It shows that Italy and Algeria have considered an alternative route that would reduce Tunisian centrality. Even if GALSI does not replace TransMed in the short term, it reveals a perception: Tunisia is not necessarily considered a reliable strategic asset, but sometimes as an inherited passage, even as a constraint.

This element should alert Tunisian decision-makers. Geography is not enough. Being located between Algeria and Italy does not automatically produce power. A country does not become an energy hub by mere positioning; it does so through investment, storage, regulation, economic diplomacy, legal certainty, infrastructure, and negotiating capacity. Tunisia has let its transit role be reduced to a passive function. In a world where energy corridors are once again becoming strategic, this passivity is costly.

In this regard, the recourse to Azerbaijani Azeri Light crude can be of certain interest.⁹ This light crude, compatible with the characteristics of the Bizerte refinery, allows Tunisia to avoid certain Middle Eastern chokepoints. The Caspian–Baku-Tbilisi-Ceyhan pipeline–Turkish port of Ceyhan–Mediterranean–Bizerte route avoids Hormuz, Bab el-Mandeb, and Suez. In a context of maritime tensions, this matters.

The Tunisian Refining Industries Company (STIR) recalls that its mission is to refine crude oil to cover the national market's needs in petroleum products.¹⁰ The choice of a crude technically suited to Bizerte can therefore be read as a rational decision. It offers a form of route security, better industrial compatibility, and, depending on contractual conditions, payment facilities useful for public treasury.

But this diversification should not be overestimated. It reduces certain risks without solving structural dependence. Tunisia remains a net importer. The Bizerte refinery remains limited. Azeri Light supply can secure part of the short term, but it does not, by itself, constitute a national energy strategy. It could, however, become a foothold for a more ambitious strategy: modernization or extension of the refinery, industrial partnership with SOCAR, business diplomacy toward the Caucasus and Central Asia, and the opening of outlets for Tunisian exports.

Tunisia's energy transition is the third dimension of the equation. The country has significant solar and wind potential, geographical proximity to Europe, and an obvious need to reduce its dependence on hydrocarbons. Yet the share of renewables remains low. The World Bank indicates that the Tunisian government aims for 35% of renewable electricity capacity by 2030, against around 3% at the time its analysis was published.¹¹ Other recent sources mention a still limited installed renewable capacity, despite gradual growth and ambitious targets for 2030 and 2035.¹²

This delay does not stem only from a technical difficulty. It reflects a problem of strategic governance. The energy transition requires investments, clear procedures, legal certainty, grid connection capacity, credible public-private partnerships, a reform of STEG, social management of tariffs, and an industrial vision. Yet Tunisia has often treated renewables as a sectoral energy file, not as a sovereignty strategy.

It seems necessary to reframe the energy transition in terms of green re-industrialization and social justice. The problem is not only to produce solar electricity; it is to know whether this transition allows the creation of jobs, the structuring of local value chains, the reduction of the energy bill, the long-term improvement of purchasing power, and the limitation of external dependence. A transition reduced to export projects of green hydrogen or isolated concessions risks reproducing an extractivist logic: the territory provides sun, wind, desalinated water, and land; the added value goes elsewhere.

Green hydrogen projects, such as H2 Notos, show European interest in Tunisia's potential. This project, announced by TE H2 and VERBUND, targets an initial production of 200,000 tons per year of green hydrogen, with a possible scale-up to one million tons, intended for the European market via the SoutH2 corridor.¹³ Such an initiative can be an opportunity if Tunisia negotiates skill transfers, locally useful infrastructure, a share of domestic consumption, qualified employment, and industrial spillovers. It can become an additional vulnerability if the country merely offers its natural resources to a European transition designed elsewhere.

The war in the Middle East recalls a simple truth: energy is not a sector among others. It is the invisible backbone of the economy. When oil rises, the budget trembles; when gas runs short, electricity becomes vulnerable; when petrochemical inputs surge, agriculture and industry are hit; when renewables stagnate, dependence persists.

Tunisia therefore needs an integrated energy doctrine. This doctrine should link four securities: energy, food, industrial, and social. Energy security implies diversification of supply, acceleration of renewables, strategic storage, modernization of refining, and better valorization of the gas transit role. Food security implies protection of inputs, anticipation of fertilizer prices, support for farmers, and reduction of critical dependencies. Industrial security implies availability of inputs, predictable energy costs, logistical infrastructure, and local production capacity. Social security implies that tariff reforms or subsidy adjustments do not translate into an explosion of inequalities.

From this point of view, the issue is not to oppose ecological transition and economic sovereignty. It is to show that the energy transition can become a lever of sovereignty if it is thought politically. Conversely, it can become a new dependence if it is left to external operators alone, to project logics, or to short-term imperatives.

The energy crisis comes at a time when Tunisian prospects are already weak. The IMF projects real growth of 2.1% in 2026 and stresses Tunisia's exposure to external shocks, particularly energy-related ones.¹⁴ The World Bank, for its part, anticipates growth of around 2.5% in 2026, then a moderation in the medium term in a context of limited financing and barriers to entry.¹⁵ These projections converge toward one idea: Tunisia does not have a growth engine sufficiently robust to easily absorb a prolonged oil shock.

The gap between the official scenario and the projections of international institutions weakens the credibility of the national macroeconomic framework. If growth remains below announcements, tax revenues will be lower than expected, borrowing needs higher, social expenditures harder to finance, and fiscal trade-offs more painful. In such a context, an oil price increase is not only a price shock; it can accelerate the entry into a decade of weak economic growth or even recession.

This perspective is politically dangerous. An economy that grows weakly, imports expensively, invests little, reforms slowly, and subsidizes under constraint becomes hard to govern. Apparent stability can mask an accumulation of tensions. Yet energy is one of the few areas where a clear strategy could produce cross-cutting effects: reducing the import bill, improving the external balance, creating jobs, attracting investment, strengthening industry, supporting regions, and giving direction to the country.

The energy crisis comes at an ambiguous political moment. Some signals of technicization or a return to institutional frameworks can be read as limited advances, especially after a period dominated by emptiness, improvisation, and the parasitic influence of populist discourse. The constitution of commissions in the highest spheres of the State, the consultation of administrative or technical experts, and the entry of certain questions into more institutional frameworks may constitute positive steps.

But nothing indicates, at this stage, a genuine political opening or a will to rebuild social mediations. Business owners, activists, unions, and civil society organizations remain under pressure. The UGTT has lost much of its role as a social partner. Dialogue structures are frozen or emptied of their substance. Municipalities are weakened. The mechanisms of social monitoring and warning no longer function as they used to.¹⁶

This situation poses a direct problem for the energy transition. An energy reform cannot be merely decreed. It touches prices, subsidies, public enterprises, households, regions, farmers, industrialists, investors, and external partners. It requires trust, mediations, compensations, and the ability to explain trade-offs. Yet a State that weakens intermediate bodies reduces its ability to lead complex reforms.

In the short term, the priority is to secure supply, integrate realistic oil scenarios into the budget, build strategic stocks, protect critical agricultural inputs, and limit inflationary effects on the most vulnerable households. In the medium term, Tunisia must modernize its refining, transform its energy relations — particularly with Azerbaijan and Algeria — into industrial partnerships, and genuinely valorize its geographical position. In the long term, it must accelerate renewables not as an ecological showcase but as the basis of a green re-industrialization, generating jobs, social justice, and sovereignty.