Fuel Prices Drop Globally, But Morocco Sees Little Relief
On April 3, global oil prices began to fall sharply, with crude oil dipping to around $60 per barrel, partly due to a trade war launched by US President Donald Trump. This drop had an immediate effect on fuel prices in the international market.
President Trump promised lower gasoline prices. Gas prices have dropped due to a nearly 25% fall in crude oil prices since January, with West Texas Intermediate falling from $80 to under $60 per barrel. Economic uncertainty from tariffs has slowed global growth and oil demand, especially in China.
In addition, the recent ceasefire between Iran and Israel led to a sharp drop in global oil prices. Initially, oil prices had spiked due to concerns that the conflict might escalate and threaten the Strait of Hormuz, a key route for global oil shipments.
However, once the situation de-escalated and the Strait remained open, markets quickly stabilized. Crude oil prices fell by around 10% within days, returning to the mid-$60s per barrel. This drop in oil prices reduced the geopolitical risk premium and translated into lower fuel costs globally.
Price and market gaps
However, in Morocco, the change has been barely noticeable. If anything, fuel prices paradoxically rose, with prices at local gas stations having dropped by only 20 cents per liter in mid April. .
But as of July 1, fuel prices in Morocco increased again, affecting both diesel (gasoil) and gasoline (petrol). Diesel prices shot up by 41 cents per liter, bringing the price at major stations like Afriquia and Shell in Casablanca to MAD 10.98 per liter, and slightly lower at Winxo with MAD 10.95 per liter.
Gasoline prices went up by 29 cents per liter, reaching MAD 12.94 per liter at Afriquia and Shell, and MAD 12.91 per liter at Winxo.
The initial minimal decrease followed by higher increases has sparked criticism, particularly given that, according to the pricing method used before fuel market liberalization in late 2015, current local prices should be much lower. Based on past calculations, diesel should now cost under MAD 9.41 per liter, and gasoline should be priced at less than MAD 10.87 per liter.
Critics argue that Moroccan fuel distributors are not adjusting prices in line with international markets. While the Competition Council noted in its Q4 2024 report that companies fully reflected lower purchase costs in gasoline prices, it also found that diesel prices dropped only slightly more than purchase costs, by just 20 cents per liter.
Even more revealing are the profit margins. In late 2024, net profits per liter reached MAD 1.28 for diesel and MAD 1.67 for gasoline, still lower than in the third quarter, but significant enough to raise eyebrows.
Conflict of interest?
The issue has also reignited political tensions. Many Moroccans point fingers at the current government led by Aziz Akhannouch, who is also the founder of Afriquia, one of the biggest fuel distributors in the country. Accusations of conflict of interest have resurfaced, with some questioning whether the government is doing enough to regulate fuel prices fairly.
These concerns are not new as Afriquia has previously been targeted in nationwide boycott campaigns in 2018. Social media campaigns like '#Degage_Akhannouch' have gained widespread traction, blaming him for 'profiting from Moroccans' hardship.'
The Competition Council fined nine fuel companies, including Afriquia, a combined MAD 1.84 billion in late 2023 for collusion, price fixing, and deviating from global price trends.
Critics argue that Akhannouch's dual role as government leader and major industry stakeholder threatens transparency, competition, and public trust.
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