Soaring fuel prices anger Moroccans as government mulls return to old cap system

Diesel prices have soared 42% from the beginning of 2016 to the end of May 2018 and now costs about $1 a litre.
Sunday 24/06/2018
Galloping prices. Fuel pumps at a gas station in Sidi Allal el-Bahraoui in Morocco.	             (Reuters)
Galloping prices. Fuel pumps at a gas station in Sidi Allal el-Bahraoui in Morocco. (Reuters)

CASABLANCA - Fuel costs in Morocco have increased 9.1% on average since price liberalisation at the end of 2015, a statement from Morocco’s High Planning Commission (HCP) said, and Moroccans are venting their anger against the government for failing to slow the rise.

The HCP said that the increase was primarily related to the increase in crude prices in the international markets.

Diesel prices have soared 42% from the beginning of 2016 to the end of May 2018 and now costs about $1 a litre.

“Increases and decreases in prices (and not only increases, contrary to the suspicion that continues to weigh on distributors) of imported refined crude are reflected in internal prices at the pump, with a lag of 15 days, but not with the same magnitude,” the HCP said. “This offset takes into account the time required for transport, storage and distribution. Declines and increases in the prices of refined products do not have an exact impact on pump prices.”

MP Abdellah Bouanou from the ruling Islamist Justice and Development Party blamed distribution firms’ “greed.” He said some firms in Morocco had not made a gain abroad while their profit margins tripled from their activities in Morocco.

“Oil companies in Morocco earn twice as much as other companies operating abroad… We do not want them to lose, on the contrary, but they must realise that there are people and a consumption that will be affected and therefore have an effect on the purchasing power and this has been proven by the HCP data in 2016,” said Bouanou.

A top business banker, who spoke to The Arab Weekly on condition of anonymity, said benefits of some oil firms had soared since the liberalisation of fuel prices, which he said raised questions about their profit margins.

Total Maroc, the country’s third-largest fuel distributor, posted a profit of $87.9 million in 2016 compared with $28.9 million in 2017.

Civil servant Abdellatif Eddoubli slammed the government’s inaction over the high fuel prices, saying: “Moroccan citizens are paying the price of the government’s inability to control the prices, which will have a serious effect on public transport and food prices.

“The poor are getting poorer while the rich are getting richer.”

Moroccans have taken to social media to call for the boycott against leading consumer brands, including Afriquia petrol stations, which are owned by billionaire and Agriculture Minister Aziz Akhannouch.

The Competition Council, which regulates prices, has been inactive since 2013, pending the appointment of new members by the authorities. Moroccan Prime Minister Saad Eddine El Othmani was working to “reactivate” the Competition Council, government spokesman Mustapha El Khalfi said.

“By intellectual honesty, the head of government came to the obvious and admitted his mistake since he had blamed the freezing of the activity of the Competition Council on its president, Abdelali Benamour, to whom he had asked to resume service until the appointment of a successor,” said Khalfi.

Benamour, however, blamed unnamed business lobbies for being behind the situation.

“When a Competition Council emerges and wants to do its job, interests emerge and lobbies get to work. I cannot tell you what lobbies, since their own is to work softly,” Benamour told TelQuel.ma.

Opposition MP Omar Balafrej, from the Federation of Democratic Left, called on distribution firms to repay of what he called “unethical” profits totalling $1.7 billion to Moroccans.

The government is weighing the option of price caps for diesel and petrol to control fuel prices.

Minister of General Affairs and Governance Lahcen Daoudi, whose surprise resignation has not been accepted by Moroccan King Mohammed VI, was dealing with the thorny issue of capping fuel prices, including the return of the price structure abandoned the liberalisation took place in December 2015.

The Federation of Service Station Managers has rejected the return to the old system, arguing it would lead to the closure of half of the service stations.

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