Capping Fuel prices : Anti-competitive practices council disapproves of Lahcen Daoudi’s decision

On Thursday, February the 14th, the Conseil de la Concurrence, a Moroccan authority charged with combatting anti-competitive practices, took a look at the request submitted by General Affairs Minister Lahcen Daoudi on fuel prices capping.

As promised, the authority issued its decision, Thursday, disapproving of the Minister’s request, which urges the government to monitor fuel prices for one year.

«The council is not entitled to define the optimal price and maximum margins expected to govern the fuel market», said the authority in a document Yabiladi took a look at on Friday. The body recalled in its decision that «deciding on fuel prices is the responsibility of the government», adding that it will reveal the «existence of possible anti-competitive prices in the market» in its next session.

A «discriminating» measure

For the Council, capping fuel prices in the Kingdom «is not enough», especially as it is not going to be ending the real problem. «The real issue is not about monitoring prices, it is more about identifying measures destined to compensate the sector’s actors, who would be affected the most by the increasing prices of oil in the world», explained the authority.

Moreover, the authority stated that capping oil prices would be a «discriminating measure». «The market is already suffering from several dysfunctions and a short-term solution cannot be fruitful».

The Council’s opinion comes after Lahcen Daoudi said in a video shared, January the 30th, by the Justice and Development Party website that a «capping mechanism is coming».

Daoudi, who said last year that the government would monitor fuel prices for one year, stressed that the decision will be implemented «between the end of February and the middle of March».

The decision is a response to the major boycott campaign launched in April, 2018, by Moroccans to protest the high cost of living. The campaign targeted three major companies, including the country’s leading fuel distributor Afriquia SMDC, owned by Minister of Agriculture Aziz Akhannouch. Capping will focus on «adjusting» fuel prices every 15 days, said Daoudi in a 2018 interview with Bloomberg.

For the record, the Moroccan government decided in 2015 to lift the cap on fuel distributors in an attempt to reduce current consumption and improve the national economy. The lift was, however, highly criticized, as fuel distributors’ profits in the country skyrocketed.