Morocco’s competition council to re-examine dysfunctions in fuel distribution market

Morocco’s competition council said it will look again into the dysfunctions marring the fuel distribution market which has spilled so much ink due to its oligopolistic nature and claims on price fixing.

The council said it will re-examine the issue following the approval of a law that fosters its mandate to ensure free competition regulations are upheld.

In October last year, the council had issued a report pointing to discrepancies with regard to free competition in the fuel distribution market which is dominated by 3 companies controlling 60% of the market.

Dysfunctions

In its latest report on the matter, the council noted that fuel companies in Morocco proceed to immediate hikes whenever there is an increase in the international market but in the opposite case, they take time to sell stored fuel before reducing prices.

The report added that profit margins remained the same for the period 2018-2021 under study, with Winxo being the most profitable and Afriquia the least.

The council warned that private operators failed to ensure fuel storage enough to cover 2 months of Moroccan market needs as stipulated by the law, adding that stockpiles sometimes fell to less than 20 days.

The report deplored that fuel companies missed the chance of cheap oil between 2018 and 2021 to build up stockpiles and reduce Morocco’s import bill.

The council recommended an updated legislative framework conducive to free competition while ensuring the strategic interest of Morocco and its energy security.

It also urged the government to take action to facilitate access to the fuel market whether in terms of imports, storage, or distribution.