After a period of doubt, oil prices have seen a significant drop for several days lately where they have stabilized around 80 USD thus approaching pre-Dame Covid levels. Rest assured, however, they are not likely to stay at this level for long.
Admittedly, they have peaked in the meantime and soared in the followingmath of the conflict in Ukraine, ($122 last June). Then the price of a barrel gradually fell back to 70 USD (fear of the prospect of a global banking crisis) and then settled around 80 USD today.
But we woke up at the beginning of the week somewhat groggy following the bad news on Sunday which announced the surprise drop in oil production decided once more by the members of OPEC +. Very bad for inflation! It is said that “it is as a preventive measure and in support of those which had been decided at the meeting of the OPEC+ group on October 5th” (reduction of 2 million barrels per day).
The OPEC+ countries include, it should be remembered, the members of OPEC (13 in number) and their partners, led by Russia (10). The latter, as well as Saudi Arabia, the United Arab Emirates, Kuwait, Iraq, Oman and Algeria, etc., have indeed, in press releases published simultaneously on Sunday, indicated another drop in their production. In total, to each his own capacity, it will be 1.1 million barrels less than expected from May and 1.6 million from July until the end of the current year.
The decision of these countries to reduce their oil production comes in a context of tension on the oil market. The current prices do not help the exporting countries which it seems would not “cover their costs” hence this announcement to raise them. In Morocco, energy prices increased by 15.4%. This is the largest increase since 1981 during the famous riots in Casablanca resulting precisely from the oil shock of 1979.
That said, the variations in the price of oil in recent years in the Kingdom have strongly affected the evolution of consumer prices. The inflation it has been facing since 2021 has many consequences for the household basket. The rise in prices weighs overall on the purchasing power of households and has a heterogeneous impact on the population.
According to the High Commission for Planning((HCP), the consumer price index (CPI) increased by 1.7% in February 2023 compared to January. A variation resulting the 3.9% increase in the index of food products and the stagnation of the index of non-food products.
The increases in food products observed between January and February 2023 mainly concern “Vegetables” with 17.8%, “Fruits” with 5.7%, “Meats” with 4.3%, “Milk, cheese and eggs with 2.3%, while for non-food products, the decline mainly concerned the prices of “Fuels” with 1.3%.
Compared to the same month of the previous year, the CPI rose by 10.1% during the month of February 2023 as a result of the rise in the index of food products by 20.1% and that of non-food by 3.6%. This inflation has many consequences. It weighs in particular on the purchasing power of households, since prices increase more rapidly than incomes.
Inflation is, in fact, apprehended from the evolution of the price of an “average” consumption basket and will therefore mask disparities that can be strong between different households. The most affected are obviously vulnerable or even modest households, particularly those living in rural areas.
