Moroccan Fuel Prices Remain High Despite Global Oil Price Drop

While Brent closed at $73.82 per barrel, a price lower than the August average ($80.36), the reductions do not exceed 20 to 30 cents per liter in Morocco, bringing the average prices of diesel and unleaded gasoline to 11.80 and 13.70 dirhams. Despite a drop of more than 10% in the price of a barrel between September 2 and 10, its effect on fuel prices at the country’s service stations "has remained limited and barely perceptible," notes Barlamane.

Since September, distributors have lowered fuel prices: first a reduction of 40 cents per liter of gasoline and 30 cents for diesel; and another of 30 and 20 cents respectively. This cumulative drop of 70 cents for gasoline and 50 cents for diesel, i.e. a decrease of 4 to 5%, is nevertheless below the 10% observed on the international market.

Why does the drop in prices not have a significant positive impact on fuel prices in Morocco? Several factors have a decisive influence on the transmission of fluctuations in world prices to domestic rates. These include suspicions of collusion among distributors, interventions by the Competition Council, the closure of the Samir refinery in 2016, the exchange rate, taxes, transportation and distribution costs, as well as the profit margins of distributors.

50% of the final price is made up of taxes and commercial margins, which embodies dysfunctions at the level of competition with a tendency for distributors to increase their profits despite the favorable environment, explains an industry player. The price increases are "linked to an international context [...] and the uncertainty about the levels they could reach is increasing every day," the government spokesman Mustapha Baitas had claimed.