Morocco: hydrocarbons companies face financial penalties for violating the terms of competition

Morocco hydrocarbons companies face financial penalties for violating the terms of competition

Hydrocarbon distribution companies in Morocco face heavy financial penalties on the grounds of breaching competition terms, by agreeing to set selling prices at the expense of consumers, without having agreed yet on the size of these sanctions.

A statement by the Royal Court indicated that the President of the Competition Council, which is an official regulatory body, informed the Moroccan King on Thursday of the decision to impose a fine equivalent to 9 percent of the annual turnover of the three main distributors.

The issue is related to the Moroccan company “Africa” and the companies “Total” and “Vivo Energy”, the “Shawl” branch in Morocco, with a lower amount being imposed for the rest of the companies.

However, the council returned to inform the king of a contradictory decision on Tuesday stipulating that all hydrocarbon distribution companies be fined on an equal basis with an amount of 8 percent of their turnover, according to the same source.

The royal court statement also revealed that members of the Competition Council have contacted the king to condemn “the ruler’s excesses and practices on the part of the president that have affected the quality and integrity of the decision taken by the council”, and “the ambiguity of the“ investigation procedures ”in this file.

Accordingly, Moroccan King Mohammed VI decided to "form a specialized committee charged with conducting the necessary investigations to clarify the situation", affirming his adherence to "strongly the independence and credibility of the institutions, and a guarantor of the smooth running of their work", according to what the statement added.

A government source said: This investigation "does not matter at all at the heart of the matter, nor does it aim to resolve the substance of the dispute, but only means the ruler of work within a constitutional institution by considering the king a guarantor of the smooth functioning of the institutions."

Fuel sale prices in Morocco have been subsidized by the state for years, before being subject to market law beginning in late 2015.

Since then, allegations of collusion among distributors have been raised to set prices that include a large margin of profit at the expense of consumers.

A report of a parliamentary investigation committee confirmed in 2018 that the increase in selling prices at petrol stations does not match the low import prices from abroad, recording “a direct impact of high fuel prices on the purchasing power of citizens”.

Moroccan and foreign companies dominate the fuel distribution market, which is imported from abroad, the most important of which is the “Africa” company owned by the rich Minister of Agriculture Aziz Akhenouch.

The latter was the target of an unprecedented boycott campaign that also targeted two companies in two other sectors in 2018, and it received real response on the ground without anyone adopting it.