Rising Brent Prices and the Impact on Fuel Costs in Morocco

Understanding Rising Fuel Prices Amidst Global Tensions

As Brent crude oil prices surge, the ongoing conflict in the Middle East intensifies global supply concerns, significantly impacting fuel prices in Morocco, where diesel now costs 15 dirhams per liter. This escalation in fuel costs has reignited discussions about fuel affordability in the country. While some may fantasize about a price as low as 9 dirhams per liter, the harsh reality of a pressured global market presents a complex value chain influenced by refined product pricing, port logistics, and local taxation. This analysis draws insights from the daily publication, Les Inspirations Éco.

The Complex Dynamics of Fuel Pricing

The misconception that fuel prices are solely aligned with crude oil prices presents a significant barrier to understanding the issue comprehensively. Unlike many nations that import crude oil for local refining, Morocco imports already refined petroleum products. Consequently, the Brent price does not directly correlate with the cost of diesel fuel. National importers source their products from specialized markets, often referencing specific pricing from hubs like Rotterdam or CIF Northwest Europe rates.

These prices are influenced by numerous external factors, ranging from global refining capacities and geopolitical tensions to freight rates and dollar parity. A simulation based on an average benchmark of $1,250 per ton from late July to mid-August illustrates this reality. Incorporating freight, maritime insurance, and port or financial fees raises the cost to approximately $1,295 per ton. When converted into liters, considering average exchange rates and product density, the goods arrive at national ports with an estimated access cost of 10.11 dirhams per liter. This arithmetic reality makes the projection of a final price of 9 dirhams technically impossible without substantial external financial intervention or massive subsidies, as highlighted in Les Inspirations Éco.

Once the product arrives on Moroccan soil, the taxation further exacerbates the cost mechanically. The implementation of the Internal Consumption Tax, set at 2.42 dirhams per liter, immediately elevates the theoretical cost to 12.53 dirhams. Additional logistical operations and handling costs are essential for transporting fuel from storage tanks to consumers' reservoirs.

This process encompasses both fixed and variable costs related to storage, infrastructure maintenance, risks associated with ship immobilization, and road transport across the country. When factoring in the earnings of industry players—approximately 0.50 dirham per liter for distributors, along with a similar amount for gas station managers—the pre-tax price climbs to 13.53 dirhams. The application of a 10% VAT raises the final figure to 14.88 dirhams including tax, a level closely matching the 14.90 dirhams observed in the market, according to Les Inspirations Éco.

Short-term forecasts do not indicate any relief for households and transport professionals, with projections for the latter half of August suggesting continued increases in international pricing towards $1,300 per ton. With the import cost potentially reaching 10.70 dirhams per liter before taxes and margins, the final pump price could exceed 15.50 dirhams.

As reported by fr.le360.ma.