Morocco to Raise Prices on Essential Goods as Subsidy Reform Begins

Starting in April 2024, Moroccan consumers will pay more for consumer products such as butane gas, flour and sugar. The reason? The government of Aziz Akhannouch is launching the gradual decompensation of the prices of these products as early as this year, until 2026, so that the money from the compensation really impacts vulnerable families, according to Challenge, specifying that the "Compensation Fund, for the period January-August 2023, cost the state budget nearly 18.5 billion DH", and that "the government team does not plan more than 16.5 billion DH for the whole of next year".

Thus, the price of a 12 kg gas cylinder will go from 40 DH to 50 DH starting next April, i.e. an increase of 10 DH each year until 2026. The consumer will therefore have to pay 70 DH for a 70 DH gas cylinder. The state will be responsible for compensating the difference that will remain between the new prices and the actual tariffs, indexed to the international market. The implementation of a price cap is also possible. The increases on sugar and soft wheat are not, for the moment, known.

State subsidies have helped mitigate the rise in the price of a 12 kg butane gas cylinder. The average subsidy amounted to around 68 DH for the period January-September 2023, a 30% decrease compared to the same period the previous year. In the first quarter of the current year, the subsidy increased to reach its peak in March at 92 DH, the highest monthly level since July 2022, and the highest support of the year 2023.

From April, the state reduced the monthly subsidy. It fell to 45 DH for the 12 kg cylinder in July, the lowest level recorded since December 2020. The support for the 12 kg cylinder increased again to reach 63 DH in September, an increase of 40% compared to July 2023.