Nine oil companies operating in diesel and gasoline supply, storage and distribution, including the French giant TotalEnergies, will pay a total settlement of more than 1.84 billion MAD in fines over their monopolistic practices in the local market. One of the companies is owned by current head of government Aziz Akhannouch, according to the Competition Council’s press release on Thursday.
Akhannouch, by the way, is also currently embroiled in a conflict of interest controversy over Afriquia’s bidding procedure in a Casablanca desalination project.
The agreement also includes a set of behavioral rectifications to which these companies and their professional organization must adhere in order to improve the competitive functioning of the hydrocarbon market in the future and to prevent the risks of competition blockage which result in harm to consumer pricing.
To enable the Council to monitor the level of unfettered competition in the markets concerned, in particular regard to the correlation between the public selling prices of diesel and petrol and the international wholesale costs of these refined products, the enterprises concerned must now prepare and transmit a detailed report enhancing the monitoring of the supply, storage and distribution of diesel and petrol. This reporting, which will be phased in over a period of three years–inclusive of quarterly feedback at a minimum–will include each company’s monthly purchases and sales at filling stations, as well as their diesel and gasoline inventory levels.
The companies concerned must also align their pricing structures with the evolution of supply and demand in the market, and in correlation with the supply cycle, storage constraints, and each company’s own commercial policy. Additionally, they must also ensure that their price modification system provides their affiliated independent service stations discretion to change their own public selling prices immediately, at any time and without prior approval.
In early August, the Council slammed the said companies as they were formally notified of such complaints as per the procedure in force under Article 29 of Law 104-12 addressing freedom of pricing and competition. Indisputable evidence shows that these corporations violated these legal provisions.
Explicit or implicit collusion–in whatever form or for whatever reason–is strictly prohibited if it is meant to obstruct or limit competition in a given market, as per Article 6 of the same statute.
A company is in breach of the law if it is inhibiting access to the market, interfering with price fixing, limiting or controlling production, or dividing markets.