Rising Global Oil Prices Impacting Morocco's Fuel Market
The eyes of Morocco are firmly set on the upcoming bi-monthly update regarding fuel prices, amidst significant fluctuations in global oil markets. On October 28, 2026, international oil prices saw an increase exceeding 1%, primarily triggered by renewed concerns regarding supply disruptions following an attack by the Houthis on a major oil refinery in Saudi Arabia using a missile. Reports indicate that Brent crude futures rose approximately 1.4% to $115.47 per barrel, while West Texas Intermediate (WTI) crude also experienced a similar increase, reaching $101.33 per barrel.
This surge in oil prices comes on the heels of a previous decline of about $2 during trading on Tuesday, as there had been hopes for a reduction in tensions within the Middle East, only for fears surrounding the security of oil installations in the region to resurface. Investors are now closely monitoring the official data on U.S. oil inventories from the Energy Information Administration, with preliminary data from the American Petroleum Institute suggesting a decrease in crude stocks by roughly 2.03 million barrels for the week ending October 23.
Additionally, attention turns to the upcoming meeting of the OPEC+ alliance scheduled for this Sunday, where expectations are that production targets for December will remain unchanged. Mohamed Jdari, an economic expert, emphasized that "the structure of fuel prices in Morocco relies on fixed determinants, with the global oil price exceeding $110 per barrel being a primary factor." He noted that rising refining costs due to pressure on stations, along with logistics and shipping expenses influenced by global strategic shifts, are critical components of this pricing structure.
According to Jdari's statements to Hespress, other elements that contribute to this framework include static tax systems such as internal consumption taxes and value-added taxes, as well as profit margins for companies and distributors. Based on these factors, an increase in fuel prices, particularly for diesel, is anticipated by the end of this month.
He further elaborated that this expected rise reflects the significant upward trend the market has experienced over the past month, especially after prices had recently dropped by 20 cents during the last adjustment. Thus, the current trajectory points towards an adjustment of retail prices to align with international market developments.
Conversely, discussions around the impacts of the new finance law, which proposes raising corporate tax rates from 35% to 40% on profits exceeding 100 million dirhams, are considered premature by the same economic expert. He stated that the implementation of this law will not take effect until January 2027, meaning any potential repercussions will not be felt until the end of that year.
Jdari added that local diesel prices are significantly influenced by movements in the Rotterdam stock exchange, from where Morocco imports its refined oil, which is currently experiencing a substantial rise in global costs, rather than the price of crude oil.
Sector Experts Warn of Further Price Increases
Hussein Lyamani, President of the National Front for the Rescue of the Moroccan Oil Refinery and Secretary General of the National Union of Oil and Gas, affiliated with the Democratic Confederation of Labor, highlighted that the fuel sector is poised for another increase in diesel prices, while a slight decrease in gasoline prices is also a possibility. This expectation is rooted in international market data, which indicates that the average price for refined diesel has exceeded $1,500 per ton on certain days, a crucial indicator for setting local prices instead of relying solely on crude oil barrel prices.
Lyamani, in his remarks to Hespress, pointed out that the increase observed in the national market is primarily linked to the widening refining margins and the significant disparity between crude and refined oil, underlining the critical importance of restarting the Samir refinery. Despite the significance of this issue, the government measures and the finance law proposal have not provided tangible solutions to stabilize or reduce prices, instead focusing on storage and strategic reserves.
He noted that profit margins for distributors are expected to shrink as prices rise and social concerns intensify, reaching their narrowest levels. There is also a noticeable variance in commercial behavior, with domestic brand companies tending to implement lower prices and hesitating to raise them, while global companies hasten to increase prices to compensate for the taxes imposed on profits.
Lyamani continued, stating that the current government approach represents a continuation of previous management practices that have exacerbated the crisis through decisive actions, such as the liberalization of prices in 2015 and the freezing of local refining activities. Consequently, imposing additional taxes on corporate profits does not resolve the issue; rather, it pushes operators to recover losses at the expense of consumers, without measures in place to protect purchasing power.
To fundamentally resolve this crisis, the union leader proposed the abolishment of fuel price liberalization and a return to regulation to protect consumers, alongside the recommissioning of the Samir refinery, reducing taxes and fees applied to fuels, and conducting a comprehensive and radical review of the entire system.
As reported by hespress.com.
