Hydrocarbons: The Competition Council points out to the failures of the system
Long-awaited, the opinion of the Competition Council on the soaring prices of inputs and raw materials at the world level and its consequences on the operations functioning of national markets, provides a series of explanations concerning the level of fuel prices within gas stations. This document, produced following the decision of the Council of April 25, 2022 by which the Council acted on its own initiative concerning this case.
In concrete terms, the goal of this opinion is to answer, initially, the question of whether or not these price increases on the national market are correlated with prices and quotations on the world market. Secondly, the idea is to analyze the impact of these increases on the competitive situation in the markets concerned. A series of conclusions were formulated at the end of the review of the inventory. First and foremost, the outdated nature of the regulations in force. This is a “market that is highly governed by regulations that have become obsolete, despite the liberalization of the sale prices of diesel and gasoline on the national market ”. The legislation still in force consist of the “dahir” (royal decree) of February 1973 on the import, export, refining, storage, and distribution of hydrocarbons. This piece of legislation does not take into account the major changes experienced by this market. A new law, 67-15, was adopted in 2015. Seven years after its publication, it has still not entered into force due to the absence of its implementing texts.
■ Reliance: The Competition Council also points to the total reliance on imports from abroad, the volumes of which are constantly increasing. Since the cessation of the activity of the Samir refinery in 2015, Morocco has been forced to import all refined products, thus increasing its reliance on world markets. The opinion of the Competition Council nevertheless specifies that during the period of activity of the Samir, “ the market operated in fact, as if Morocco imported all of these refined products from abroad. Only the subsidies supported by the general budget of the Government made it possible to maintain the selling prices of diesel and gasoline, as set by the Government, at levels deemed acceptable”.
■ Concentration: Another aspect pointed out is the high concentration in the import and storage markets, whose level is generally below the threshold provided for by the regulations. Currently, the installed storage capacity in 2021 is 1.2 million metric tons, 15% higher than in 2018. However, this capacity is only partially used (50%). “ This underutilization is explained, according to the operators, by the high storage costs and by the risks relating to the high volatility of the international prices of these materials”. In the current state of affairs, “the establishment of security stocks is behind schedule and is encountering difficulties in defining the terms and conditions for covering storage costs between operators and the public authorities”, it is indicated. The Competition Council also points to a high concentration of operators on the import market, “given that the four largest operators, namely Afriquia SMDC, TotalEnergies Marketing Maroc, Vivo Energy Maroc, and Petrom, alone achieve approximately 68% of imports in volume, and represent 61% of the installed storage capacity, despite the number of new operators which has increased from 11 in 2018 to 25 currently”. This high concentration is also observed at the level of the distribution market. “The distribution network is 53% owned by four operators: Afriquia SMDC, TotalEnergies Marketing Maroc, VivoEnergy Maroc, and Petrom”. Despite the existence of a large number of active distribution companies (29 operators), the four leading companies alone generate around 65% of the total market turnover.
Mohamed Ali MRABI
