Morocco’s government is set to reinstate the “exceptional” financial support for professionals in the road transport sector.
The decision comes in the wake of professionals threatening to go on strike following the recent uptick in fuel prices. The measure would enter into effect starting in September, according to converging reports.
The exceptional support had been temporarily halted but will now be extended to professionals in both passenger and freight transport.
The government’s primary objective in reinstating the support is to mitigate the repercussions of rising fuel costs on the prices of goods and passenger transport.
They first launched the program in 2022, issuing financial support for road professionals in the form of 10 installments between June 2022 and 2023. The total cost of the fuel subsidies reached MAD 5 billion ($490 million).
After the launch of the program, a number of professionals criticized the government for failing to give them their share of the subsidies.
Despite applying for the support program, 40% of workers did not receive subsidies, union activists claimed.
Workers have also complained that the subsidies were insufficient to offset the rise in fuel prices, adding that with the government support, they can’t pass on the cost to consumers by raising tariffs.
Some critics of the measure suggested that the government should instead subsidize fuel prices at the pump instead of handing cash to transport professionals.
In the weeks that followed, the country’s Economy and Finance Minister Nadia Fetah Alaoui declared that providing “full-scale” subsidies is “outside the reach of the state budget.”
Meanwhile, the county’s government watchdog, the Competition Council, said in a report published in September 2022 that “direct support for gasoline and diesel harms the national economy.”
According to the council, the measure “has shown its limitations” in the past as it had monopolized substantial state funds, exceeding MAD 50 billion ($5 billion) in 2012, which is equivalent to the budget of the Ministry of National Education or about five times the budget allocated to the Ministry of Health at that time.
Instead, the council recommends reviewing the regulations governing the fuel market in Morocco to boost its competitiveness and fight against predatory practices that “could” be the cause behind rising fuel prices.