Oil Price Slump Sparks Hope for Lower Fuel Costs in Morocco

While Brent and WTI, global crude oil benchmarks, have respectively lost 10% (with a quote at $71.06) and 8% (with a quote at $68.16) in a week (2/6 September), in Morocco, "we are far from the summer of 2022, when fuel reached 17 dirhams with its ripple effect on the prices of all products and services," notes Challenge, recalling that "the dizzying rise in hydrocarbons (oil and gas) at that time, combined with the drought and the surge in commodity prices, had catastrophic consequences on the purchasing power of citizens and inflation levels".

In Morocco, the new drop in oil prices should be reflected in the coming weeks on the display boards of service stations. Proof of this, consumers are "already feeling the benefits of the recent easing of global prices," explains the weekly, specifying that "diesel, the most consumed fuel type in our country, has fallen below the 12 dirham mark with the majority of distributors." "At this pace, importing countries like Morocco could look to the future with optimism in the short and medium term," the article’s author estimates.

Moreover, Citi analysts, one of the world’s largest financial institutions, believe that oil prices should see a significant drop by 2025 with Brent below $60 a barrel, a decrease of more than 20% compared to current forecasts. "The government could (thus) have additional resources to finance its social programs, including direct aid and the reconstruction of Al Haouz," the same media deduces. Similarly, Aziz Akhannouch’s team will be able to save, among other things, the subsidies distributed here and there, if pump prices return to a certain normality.

Just as consumers "who are struggling under the weight of expenses and wish for all possible price reductions, the Executive also greatly needs any new revenue to consolidate the foundations of the welfare state, which is one of the priority projects of the next Finance Act. Attention will therefore be focused on distributors, whose movements will be closely monitored," concludes the publication, calling on the Competition Council to maintain vigilance.