Morocco to gradually liberalise its domestic oil market

Jul 03, 2002 02:00 AM

Morocco will implement a gradual liberalisation of its domestic oil market over the next six years as part of an agreement with the European Union, a senior government minister said. General Affairs Minister Ahmed Lahlimi said a cabinet meeting lifted the protection imposed in 1997 on refined oil products, including diesel oil.
"The move aims at encouraging new investments in the oil distribution sector," he said. Morocco liberalised in the 1990s imports of refined oil products but imposed heavy customs tariffs to protect main oil refiner Samir, then slated for sale.

Sweden-based Saudi Corral Holding purchased Samir and its subsidiary Societe Cherifienne des Petroles in 1997 for around $ 500 mm. A gradual lifting of these tariffs -- 10 % per year over six years -- was expected to begin this month in accordance with a free-trade zone agreement signed with the EU in 1996. "By 2007, Morocco's oil sector will be fully liberalised... This is a state commitment which will be implemented from this month," Lahlimi said.

Samir head Abderrahmane Saaidi said the move would jeopardise the development of his company. "We're very anxious... Samir will face hard times because the government didn't gave us the necessary time to upgrade our refining units," he said.
Samir launched in 2000 a $ 700-mm investment plan over five years to modernise production tools and reduce the sulphur in its refined products. A former privatisation minister, Saaidi said the dismantlement of tariffs and a change in the price structure imposed by the liberalisation "will dramatically reduce Samir's profit margins".
Samir produces around 8.0 mm tpy of oil products (160,000 bpd), including 1.5 mm tons of diesel oil. It imports an extra 500,000 tpy to meet local demand.

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