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Morocco’s Competition Council Slaps $180 Million Fine on Fuel Firms for Price Fixing

 |  November 23, 2023

Morocco’s Competition Council announced on Thursday that it has fined the nine fuel companies operating in the country a total of 1.84 billion dirhams ($180 million). The penalties were imposed due to the companies’ failure to comply with free competition rules and engaging in price-fixing activities.

The Competition Council disclosed that it had successfully negotiated an agreement with both petrol and diesel companies, along with their professional groups, to collectively settle the imposed fine. The decision comes in the wake of a report issued by the council in October 2022, highlighting systemic dysfunctions within Morocco’s diesel and petrol market, where three dominant companies hold a staggering 60% market share.

Key concerns raised in the report included instances of price fixing, the observance of higher prices in comparison to international markets, and non-compliance with legal provisions related to storage. These issues have underscored the need for regulatory intervention to ensure a level playing field for all market participants.

The report specifically pointed out that the Moroccan fuel market is heavily concentrated, with three major companies wielding considerable influence. The lack of competition in the sector has allowed these entities to control a significant portion of the market, leading to practices that undermine fair competition.

Read more: NY Bus Company Accuses Rivals Of Price-Fixing Scheme

It is noteworthy that back in 2018, Afriquia, the largest fuel distribution company in Morocco and a part of the AKWA group owned by Prime Minister Aziz Akhannouch, faced public backlash. Consumers initiated a boycott, accusing the company of charging exorbitant prices. The incident shed light on the broader issue of pricing transparency and fairness within the fuel industry.

Morocco’s dependency on imported refined energy products became pronounced after its sole refiner went into liquidation in 2015. This heightened the importance of effective regulation to prevent anti-competitive behavior and ensure the well-being of consumers.

The Competition Council’s decision to fine the fuel companies sends a strong signal about the government’s commitment to fostering fair competition within the market. By addressing issues such as price fixing and non-compliance with legal provisions, the regulatory body aims to create an environment that encourages healthy competition, protects consumer interests, and promotes a transparent and accountable energy market in Morocco.

Source: The Print