Morocco Unveils Gradual Butane Gas Price Hike Plan

Saturday 30 March 2024 - 09:40

Morocco is bracing for a paradigm shift in consumer spending as the government announces plans for a phased increase in the price of butane gas, coinciding with projected escalations in potato prices over the coming three years.

Departing from long-standing subsidy practices towards more targeted aid initiatives, the Moroccan government has unveiled its strategy to gradually reduce the subsidy fund supporting essential commodities, including butane gas, sugar, and flour.

Commencing April 1st, consumers will experience a notable uptick in the price of a 12-kilogram butane gas cylinder, soaring from the current 40 dirhams to 50 dirhams, initiating a multi-year adjustment period for households.

Mustapha Baitas, the government spokesperson, reaffirmed the administration's dedication to executing this reform during a press briefing on March 7th.

"These measures constitute part of a broader initiative to bolster social protection," he emphasized, stressing the imperative need for financial adjustments to facilitate direct assistance to qualifying families.

Under the new paradigm, the government aims to pivot from generalized subsidies towards targeted support frameworks. A direct social assistance program has been instituted to aid economically disadvantaged families listed in the unified social registry.

This social assistance initiative, inspired by the Royal Directives articulated in King Mohammed VI's parliamentary address in 2020, targets millions of families, particularly those lacking family allowances or with vulnerable children.

With an annual budget projected to escalate from MAD 25 billion ($2.479 billion) in 2024 to MAD 29 billion by 2026, this program is poised to significantly enhance the welfare of families, encompassing the establishment of "dignity income for the elderly," "family allowances for all households," and "lifelong support for individuals with disabilities."

While the gradual butane gas price increments are expected to impact household budgets, especially those of vulnerable families, the government has opted for a phased rollout spanning three years.

This strategic approach aims to provide Moroccans with the opportunity to acclimate to the changes and explore alternative solutions as needed. In line with this decision, butane gas prices will witness a progressive increase over the course of 2024 to 2026, amounting to a 10-dirham rise annually.

Consequently, the price of a 12-kilogram gas cylinder is slated to reach 70 dirhams by 2026, underscoring the government's commitment to fiscal reform amidst prevailing socioeconomic challenges.