Moroccan Fuel Prices Remain High Despite Global Oil Price Drop

The expected drop in fuel prices at the beginning of the year is slow to become a reality. Diesel and gasoline are respectively sold at 14 DH and 13DH in Moroccan service stations despite the worldwide reduction in crude oil prices of around 10% at the end of 2023 and the latest decision of the Competition Council which concludes to a price agreement. In a statement to Hespress, Houssine El Yamani, secretary general of the National Union of Oil and Gas Industries under the CDT, explained that before the liberalization of prices, the price of diesel was capped at 11 dirhams and that of gasoline at 11.66 dirhams until January 16, 2024. "These figures are based on an international average, where the cost of a ton of diesel is around $786, and that of gasoline at $735 per ton, taking into account the costs and profit margins of the distributors," he adds.

According to El Yamani, diesel now costs 13.30 dirhams, gasoline 14.50 dirhams. "This surge in distributor margins, tripled, is accompanied by an increase in transactions on the black market, with informal sales outlets offering attractive discounts," he further explains. A worrying situation. "Where is the effectiveness of the regulatory bodies that seem to tolerate these illegal practices, endangering the safety and quality of the fuel?" questions the secretary general of the National Union of Oil and Gas Industries under the CDT. In the face of this less than flattering picture, he pleads for an overhaul of the oil regulatory framework.

"Faced with the ineffectiveness of the Competition Council to sanction offenders," alternative distribution stations should be allowed to source directly from suppliers offering fair prices, suggests the oil industry player. According to him, this would help stabilize prices and reduce dependence on illegal players. El Yamani recommends the temporary suspension of the liberalization of fuel prices until the establishment of fair competition conditions, the reactivation of the activities of the Moroccan Refining Company (Samir), in order to preserve the national heritage. Not to mention the reassessment of the taxation of fuels to align it with international standards, the modernization of the regulatory framework of the oil sector and the establishment of a national energy agency.