Energy Finance Headlines Morocco

Morocco’s energy, transport subsidies cost at least 1.6 bln dirhams monthly, budget minister

Morocco’s government is spending at least 1.6 billion dirhams ($160 million) a month on measures to cushion households and businesses from higher energy and transport costs, Budget Minister Fouzi Lekjaa said.

The support package focuses on subsidies for butane gas, electricity price freezes and financial aid for professional transport operators, Lekjaa told reporters.

State support for butane gas has risen sharply, with the government now covering 78 dirhams per 12‑kilogram canister, up from 30 dirhams previously, to keep retail prices unchanged for households.

The additional cost of the measure is estimated at around 600 million dirhams a month, he said.

Electricity tariffs for households and businesses have also been frozen despite rising production costs linked to higher prices for natural gas, coal and fuel oil. The decision aims to protect purchasing power and economic competitiveness and carries an estimated monthly budgetary cost of about 400 million dirhams.

The third component of the package targets transport operators. The government has introduced a revised support mechanism following a previous scheme that ran from March 2022 to February 2024 at a cost of nearly 7 billion dirhams.

Under the new system, which Lekjaa said is more tightly targeted, transporters receive aid equivalent to around 3 dirhams per litre of diesel consumed. The first tranche of payments began on Thursday and covers the period from March 15 to April 15.

Unlike the earlier scheme, which relied largely on vehicle tonnage and was criticised for poor targeting, eligibility under the new programme is determined through stricter criteria applied via a dedicated digital platform.

Only operators meeting those conditions will receive support, in a bid to curb windfall gains and ensure aid is linked to actual activity.

The monthly cost of the transport subsidy is estimated at 648 million dirhams, Lekjaa said.

Taken together, the measures bring the total monthly bill for the state to at least 1.6 billion dirhams.

Lekjaa said the government would use “all available budgetary leeway” to finance the support, adding that there were currently no plans to introduce a supplementary budget or amend the finance law.

 

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