Soaring production costs | L’Economiste

There will be no turning back concerning the liberalization of the price of petroleum products. Prices have soared and the government is trying to manage the various repercussions while ruling out any fuel subsidies. At least this is what Nadia Fettah Alaoui, Minister of Finance, declared to M.P.s on Monday, June 6th.

This surge in the price of petroleum products is raising questions and concerns in business circles and among households. “Their sharp rise since the beginning of the year should, given the cost structure, have a significant impact on producer prices. The direct and indirect cumulative effect is, all other things being equal, estimated to result in an increase in producer prices of 5.1%”, estimates the Centre Marocain de Conjoncture (CMC) observatory. This increase varies from one sector to another and depends on the share of oil in intermediate consumption. Transport, electricity production, and construction activities will have to suffer the greatest increases with a rise in producer prices varying between 7.4% and 15.4%. The manufacturing industry should experience a relatively more moderate increase in production costs, on average by 6.7%. The impact on production costs is deemed lower in tertiary activities excluding transport, ie an average of 2.5%.

It must be said that the share of refined oil is around 37% of the total intermediate consumption of the transport branch, 35% for maritime fishing activities, 20% for extractive industries, and 8% for agriculture. This share of refined oil is 5% of the value of intermediate consumption in the industrial sector. “The construction and public works branch, like all tertiary activities, has fairly comparable intermediate consumption of petroleum products, with input coefficients in relation to the total varying on average between 2 and 4%”, emphasizes the CMC observatory.

For the experts of the Centre Marocain de Conjoncture, the rise in the price of petroleum products weighs on costs and on the purchasing power, and runs counter to any recovery in the economic activity, whether through investment, consumption, or external demand. This increase in the price of petroleum products thus adds to the difficulties of an atypical economic situation, marked by weak growth prospects (1.8% growth of GDP) due to the poor performance of the agricultural sector and to the deterioration in external demand.

 Khadija MASMOUDI