Aziz Akhannouch is the subject of strong criticism because of his double role as a political leader and main shareholder of Afriquia, the leader of the local hydrocarbons market.
Soaring fuel prices in Morocco have reignited controversy over conflicts of interest between business and politics, exposing Prime Minister Aziz Akhannouch, an oil magnate, to fierce criticism.
For the first time since the war in Ukraine, Mr. Akhannouch had to explain himself to Parliament last week about the sharp rise in food and fuel prices (14 dirhams per liter of diesel at the pump, i.e. 1.32 euros, a record against a monthly minimum wage of just over 260 euros). At the heart of the parliamentary debate: a request to cap the “exorbitant” margins of fuel distributors.
On the defensive, Mr. Akhannouch, a businessman who built his fortune on the distribution of hydrocarbons, described as “lies” the “enormous” profits denounced by deputies, ensuring that they are “virtually the same since 1997”. If his position is not threatened, the Prime Minister is in the hot seat because of his double role as a political leader and main shareholder of Afriquia, leader of the local hydrocarbons market with Total and Shell. Under pressure, his government released an envelope of 200 million euros in favor of road hauliers in order to appease their anger.
“Excessive” margins
Consumer prices (+ 3.3% for January and February 2022 over one year) will continue to climb to “levels above the average of the last decade”, warned the High Commission for Planning (HCP). Result: the morale of Moroccan households recorded since the beginning of the year at “its lowest level since 2008” , according to the HCP.
This is not the first time that Morocco, dependent on hydrocarbon imports, has gone through such a crisis, but until 2015 the state-subsidized gasoline and diesel at the pump. A guarantee of “social peace” for decades, this subsidy was buried in 2015 because of its high cost to the state coffers. At the time, the government planned to compensate for it with direct monthly financial aid to the poorest, support that never saw the light of day.
In 2018, three years after the liberalization of the market, a scandal broke out: in a parliamentary report, fuel distributors were accused of earning “excessive” margins, against a backdrop of denunciations of high prices on social networks. Boss of Afriquia and Minister of Agriculture, Aziz Akhannouch finds himself in the dock, personifying the collusion between the business world and the ruling class.
Seized the case, the Competition Council concluded in July 2020 an agreement between oil giants. Fines fall on the trio Afriquia, Total and Shell up to 9% of their annual turnover. But, accused of irregularities in the procedure, the president of the council, Driss Guerraoui, was dismissed by King Mohammed VI. Sanctions will not be applied.
Refinery shut down
Since the liberalization, the profits of distributors have reached “more than 45 billion dirhams [4.25 billion euros] until 2021″, indignant Hussein El Yamani, delegate of the Democratic Confederation of Labor (CDT).
“Whatever the origin of the surge in the price of the barrel – a war, a shortage, a pandemic -, the distributors take their profit as if nothing had happened” , recently denounced the weekly TelQuel. Headlining “The ambiguous game of Akhannouch”, this newspaper illustrated its front page with two portraits, one serious and the other smiling, thus captioned: “Passive Head of Government” and “Happy Businessman”. “The conflict of interest is obvious within the government,” said economist Mohamed Benmoussa, quoted by TelQuel.
The executive is also criticized for its “inability” to restart the only refinery in the kingdom, located in Mohammedia, in liquidation since 2018. For the trade unionist Hussein El Yamani, it must either be nationalized or facilitate its takeover. Its restart “will lower prices by more than one dirham per litre” , he pleads, given that “imported crude oil is cheaper [than refined] and that its storage capacities are greater than those of oil companies. But the Akhannouch government has so far shown no willingness to respond to this call.
