Morocco’s Competition Council Urges Fuel Market Reforms Amid Soaring Prices

In its opinion No. A/3/22 on the surge in the prices of inputs and raw materials worldwide and its consequences on the competitive functioning of domestic markets for the case of fuels (Diesel and Gasoline), the Competition Council recommends to urgently, as a priority and in depth, review the framework and mode of regulation of the diesel and gasoline markets, to further relax the conditions of access to the upstream and downstream diesel and gasoline markets by accelerating the implementation of the recommendations issued by the Competition Council in 2019, and to review the legal and regulatory framework governing the contractual relations between distribution companies and service stations.

It also calls for encouraging operators in the diesel and gasoline markets to use risk hedging instruments, to study the opportunity to maintain and develop refining activity in Morocco and to extend the tax regime currently applied to the protected sectors, to the petroleum products distribution market, while introducing an exceptional tax on the excess profits of diesel and gasoline import, storage and distribution companies.

The institution also recommends ruling out any possible return to the direct subsidization of these products and instead introducing direct aid to the most vulnerable populations and appropriate tax relief for the middle classes. Finally, to accelerate the implementation of the strategy for an energy transition.