Fuel distribution is very profitable in Morocco, with a profitability of up to 60 percent… and the entry of new companies did not create strong competition – Hoy 24

A new report from the Competition Council concludes that the hydrocarbon distribution sector in Morocco is highly concentrated, with high economic profitability, in some cases reaching 60 percent, considering that the entry of new players into the sector does not help to develop their competitiveness.

This was the case in a new opinion of the council, which was revealed today, Monday, on the “significant increase in the prices of raw materials and raw materials in the global market, and its repercussions on the competitive functioning of the markets (the state of hydrocarbons).”

The opinion highlighted that the hydrocarbon distribution activity continues to be profitable in view of the very high financial returns that can be obtained from it, highlighting that the company Nexo, for example, achieved a rate of return of more than 60 percent, followed by Vivo Energy, which achieved a high rate ranging between 44 and 52 percent. As for Africa, the company said it fluctuated between 11.5 and 22 percent.

According to the report, the differences in the perceptible levels of profitability of the actors, in particular, are attributed to the differences registered at the level of investments made by each actor, especially in the development of storage capacities and the distribution network. Pointing out, for example, that Africa Company allocated an average investment during the 2018-2021 period, amounting to an average of 319 million dirhams, in the field of storage infrastructure and service station network development, with an investment of about 185 million dirhams in the company “W” The amount allocated by the company “SMDC Afriquia” The company “Maroc Energy Vivo” also made an investment of 285 million dirhams.

As a general summary of the current opinion, the council points out that the naphtha and gasoline markets are characterized by a high percentage of concentration, either in the initial or final stages of the value chain, despite the entry of new actors, whose size and capabilities was not enough.