Rising Fuel Prices and Economic Implications in Morocco
The surge in fuel prices in Morocco has exceeded two dirhams, primarily driven by escalating tensions in the Middle East and the blockage of the Strait of Hormuz. This increase reflects the sharp rise in oil prices in the international market, where financial flows react swiftly to geopolitical uncertainties. Given Morocco's deep integration into international trade and industrial value chains, it is not immune to these dynamics. Economist Abdellatif Komat asserts that the impact of Middle Eastern tensions on foreign investments does not follow a mechanical logic. He explains, “The impact of geopolitical crises on foreign investment flows is neither automatic nor uniform. It largely depends on investors' perception of risk and the geographical arbitrage they undertake,” highlighting the nuanced nature of investor behavior in response to geopolitical events.
Three economic mechanisms typically emerge in such contexts. The first is a phenomenon of hesitation, where international investors often adopt a wait-and-see strategy amid increasing geopolitical uncertainty. Consequently, investment decisions, particularly in industry or infrastructure, may be postponed. The second mechanism involves geographical reallocation of capital, as international tensions sometimes prompt investors to shift their projects to countries perceived as more stable. A third potential phenomenon is a safe-haven effect for relatively stable economies within their regional environments.
International institutions have observed a growing impact of geopolitical fragmentation on the global investment landscape, and Morocco may experience some indirect effects. As Komat notes, investors rarely assess risk on a single-country basis. “In practice, investors often analyze risks at a regional level, particularly within the MENA or Mediterranean space. An escalation of tensions in the Middle East can thus lead to an increase in the risk premium for the entire region,” he observes.
The potential consequences of these dynamics are well-documented in economic literature: delays in certain industrial projects, a temporary slowdown in investment announcements, or a tightening of financing conditions. Recently, foreign investment flows into Morocco have shown a favorable trend. This positive momentum is corroborated by end-of-year economic indicators for 2025, which report controlled inflation at 0.8%, a reduced budget deficit of 3.5%, and a declining Treasury debt at 67.2%. Another notable achievement is that foreign direct investments (FDI) have surpassed 56 billion dirhams for the first time.
The Moroccan Safe Haven Effect
However, in certain geopolitical configurations, regional crises can paradoxically enhance the attractiveness of some countries. Abdellatif Komat emphasizes that Morocco possesses several structural strengths that can attract international capital in such contexts. “When certain areas become unstable, investors seek politically stable economies that are close to European markets and have robust industrial infrastructures. Morocco precisely embodies these characteristics,” he analyzes. Among these factors are the country's relative political stability within its regional environment, its geographical proximity to Europe, and its free trade agreements with various economic partners. Furthermore, Morocco's progressive industrialization plays a crucial role as well. Over the past two decades, several export sectors have consolidated, particularly in automotive, aeronautics, and agri-food industries.
These sectors have helped integrate Morocco into international value chains, thereby strengthening its role as an Euro-Mediterranean industrial platform. According to estimates cited by Abdellatif Komat, the country meets approximately 90% of its energy needs through imports. This dependency renders the economy particularly sensitive to fluctuations in oil and gas prices on international markets. “When international energy prices rise, Morocco's energy bill increases immediately. Energy imports grow faster than exports, which mechanically widens the trade deficit,” the economist emphasizes. In this context, authorities typically employ a straightforward macroeconomic estimate: a $10 increase in the price of a barrel of oil could raise the country's energy bill by approximately 6 to 8 billion dirhams annually.
Given the current situation marked by an increase in oil prices from around $75 to nearly $100 per barrel, the potential impact could be significant if this trend continues. The recent fuel price hike on Monday led to a rush at gas stations by motorists on the evening of March 15, 2026. According to analysis from Abdellatif Komat, this could result in an additional cost of over 20 billion dirhams for energy imports. For context, Morocco's energy bill reached approximately 150 billion dirhams in 2022, according to data from the Office of Foreign Exchange, before contracting to 107 billion dirhams by 2025, as per official estimates. In a scenario of sustained rising oil prices, the energy bill could once again hover around 125 to 130 billion dirhams.
The long-term increase in the energy bill could disrupt several macroeconomic balances. The first concern involves public finances. The Compensation Fund budget, which supports certain energy and food products, is capped at 13 billion dirhams for 2026, according to official budget data. A prolonged rise in energy prices may compel authorities to enhance support mechanisms for sensitive sectors such as transport, agriculture, or electricity. Energy serves as a catalyst for price increases throughout the economy, with fuel directly influencing transport costs and indirectly affecting industrial and agricultural production costs.
“Oil transmits inflation through several channels. There is a direct transmission via fuels, but also indirect effects through production costs for businesses,” explains Abdellatif Komat. This dynamic can also have monetary implications. Bank Al-Maghrib had raised its benchmark rate to 3% in 2022-2023 to contain inflationary pressures, which has since been adjusted to 2.25%. However, prolonged energy tensions could naturally impact monetary policy, necessitating adjustments to maintain macroeconomic stability.
Moreover, beyond energy, geopolitical tensions may affect logistics costs and international supply chains. In Morocco, over 70% of goods transport occurs by road, making logistics costs particularly sensitive to diesel prices. In maritime transport, fuel accounts for 30% to 50% of operating costs for ships, while in aviation, jet fuel constitutes about 25% to 30% of airline costs. Consequently, an increase in energy prices can lead to higher shipping and air freight costs, directly impacting export competitiveness, which is already evident with the recent fuel price hike.
For Moroccan exporting industries, particularly in automotive and aeronautics, the shock is twofold: increased transportation costs for imported inputs and rising export costs for finished products. In heavy industries such as cement, steel, or chemicals, energy typically represents 20% to 40% of production costs, according to sector estimates. Thus, a rise in oil, gas, or coal prices can quickly translate to higher industrial costs. Some sectors have already experienced significant cost pressures. For instance, in the reinforced concrete industry, production costs have surged by over 50% in recent periods, based on sector estimates cited by Abdellatif Komat.
As reported by fr.le360.ma.
