The government of Morocco has confirmed a plan to control prices of fuel as it seeks to defuse anger over the cost of living that has already ignited street protests and consumer boycott.
The plan, which will have to be approved by Prime Minister Saad-Eddine El Othmani, will permit the government to adjust fuel prices every 15 days. This set up would run for 6 to 12 months, said General Affairs Minister, Lahcen Daoudi, noting that El Othmani was expected to “sign it any time. All I can say now is that it will be enacted this year.”
Price increases has unleashed social unrests in the country that has made the government concerned as consumer inflation was an annual 2.6 per cent in May, and the central bank projects that it would stay around that level this year before falling to 1.4 per cent in 2019.
The unrests, which was sparked by social media outrages was a reaction to the prices of dairy products which developed into a complete boycott campaign that has hit the balance sheets of companies like French food giant Danone.
Fuel subsidies were initially lifted in 2015 as part of an austerity measure, following which, criticisms trailed activities of fuel distributors, whose profits soared because of questionable increases. Under the new plan, the government can impose temporary measures to counter excessive fluctuations in prices brought about by extraordinary measures, Mr Daoudi said.
While the proposal would impact the margins of distributors like Total Maroc and Vivo Energy, “constant dialogue will be maintained” with the Moroccan Petroleum Group, the industry operators organization known by its French acronym GPM, according to Daoudi.
Shares in Total Maroc, the North African country’s second largest fuel distributor, have fallen by almost 50 per cent on the Casablanca stock exchange since May 9, when Mr Daoudi announced that the government intended to cap fuel prices.
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