Morocco’s competition council fines fuel distribution companies $180 mln for price fixing

Morocco’s competition council issued a fine of 1.8 billion dirhams or 180 million dollars against nine fuel supply, distribution, and storage companies for their failure to respect fair competition standards in the county.

The council did not unveil the name of the nine companies in its statement but said it had reached an agreement with them and their professional lobby group so that they can pay the fine collectively.

The council had issued a report in October 2022 revealing a set of dysfunctions in the fuel distribution market in Morocco, notably price fixing between the largest companies in the country.

It also showed the oligopolistic nature of the diesel distribution market with three companies dominating the market share and setting prices that do not reflect the reality of prices in the international market.

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.