The Competition Council in Morocco revealed that fuel distribution companies have doubled their profit margins over the past few years, recording what it described as “negative behaviors” of actors in the sector, by nullifying competition over selling prices.
The report of the Competition Council, an official institution concerned with ensuring transparency in economic relations, controlling the status of competition in the markets, monitoring illegal commercial practices and economic focus, comes in a context where fuel prices are causing widespread controversy in Morocco, and accusations of “monopoly and greed” fuel companies.
The report of the Moroccan Corporation indicates that the activity of distributing diesel and gasoline is very profitable in view of the very high financial profitability ratios that can be gained from it, and shows that the data for the period between 2018 and 2021 show very high and continuous levels of profitability in general, with differences between companies.
The report, issued yesterday evening, Monday, highlighted that the high profitability and positive results related to the financial accounts of companies “do not encourage the actors to compete”, which explains, according to the same source, that none of them (the actors) have left these markets over the past 10 years, and their negative behaviors by nullifying any Competition on selling prices.
It rose in the Moroccan street in recent weeks, calling for the government to intervene to determine the ceiling of fuel prices, after it witnessed a significant increase in the wake of the Russian invasion of Ukraine, which caused a parallel rise in the prices of most basic food commodities.
Despite its slight decline in the last few weeks, to 14.74 dirhams per liter, equivalent to 1.38 US dollars, accusations of “greed and profit accumulating” are still being pursued by the fuel companies.
The Moroccan Prime Minister, Aziz Akhannouch, owner of Africa Gas, which is one of the most important players in the hydrocarbon market in Morocco, as well as the French Total and the Dutch-British Shell, issued the hashtag “Akhnoush Leave”, Trending for weeks on social media platforms in Morocco.
The fuel market in Morocco, according to the Competition Council, remains within the old regulatory legal framework, as it follows the same administrative scheme for legalization and the same formula in setting selling prices, despite the liberalization of fuel prices in 2015 after the state lifted the direct support it was providing to the sector to ensure price stability. , given the heavy cost to the state finances.
In the face of repeated calls from citizens to end liberation and return direct fuel subsidies, the Council recommends excluding any return to this “harmful economy” trend, calling instead for the allocation of direct aid to the most vulnerable population and the granting of appropriate tax exemptions for the benefit of the middle class.
The current uncertainties surrounding international markets, linked to the decline in supply and the rise in demand, remain a major threat to the security of Morocco’s hydrocarbon supplies, as it depends entirely on foreign imports. With regard to diesel, the available stock in 2021 was only authorized to cover about 29 days of consumption on average, while the available stock of gasoline enabled it to cover only 32 days of consumption, according to the data provided by the report.