Friday, March 31, 2017

Moroccan Fuel Prices to Drop in April

Good news for locals and visitors alike - fuel prices are expected to fall sharply from the 1st of next month. And, no, it's not an April Fool joke! Fuel prices are expected to show the biggest decline in the last two years

Prices are expected to fall by an average of 33 cents for diesel, while petrol drops 17 cents per litre.

According to L'Economiste diesel consumption dominates with 83% share of the market. Since the closure of the Samir refinery, Morocco has been importing refined products. The current price of gas oil is about $ 450 a barrel, substantially the same as petrol. It is the taxes that make the difference to the consumer: about 3 dirhams per litre for diesel and 4 dirhams for petrol.

In order to fix the price of fuels in force for a fortnight, distributors rely on a calculation formula composed of 95% of the average of the international quotations and the dollar. After that the average of the quotations must be multiplied by the average of the dollar. "Whenever there is a decline in oil prices, it is passed on to consumers. It is also valid in the event of an increase," says Adil Ziady, president of the Petroleum Grouping of Morocco (GOC). To guard against fluctuations in the dollar, some companies are hedging. The objective is not to be taken short in case of a sharp rise in the US currency between the time of purchase and payment, which occurs 30 days after delivery.

Since the abolition of the former subsidy, fuel prices have been free. They are in principle determined according to the cost structure of each company. The oil companies advise their trading network of price levels to remain competitive. But they are not obliged to apply them to the nearest cent. Moreover, the Law on Freedom of Prices and Competition prohibits the formation of cartels and price fixing.


1 comment:

Sir Murray Rivers QC said...

No cartels and price fixing? That's a bit Un-Australian isn't it?