Rabat - Although Morocco’s government is “well aware” of the exponential rise in hydrocarbon prices, providing state subsidies for fuel is off the table in the light of the current state budget, Economy and Finance Minister Nadia Fatah Alaoui reported.

During the weekly hearing session in Morocco’s Chamber of Representatives, Alaoui explained that the government has enacted a number of measures to mitigate the effect of rising hydrocarbon prices. However, providing a nationwide plan to subsidize hydrocarbon is not feasible given the current state of the treasury.

The Minister stressed that the dramatic rise in hydrocarbon prices is the result of external shocks caused by the international crisis.

Despite the tremendous stress on fiscal resources, Morocco has managed to continue subsidizing utility prices. As a result, prices remained stable throughout the COVID-19 economic hiatus and the spillover from the Ukraine war, the minister pointed out.

To combat the rising hydrocarbon prices, the government opted to allocate financial subsidies directly to transit professionals. 180,000 transit vehicles have benefited from fuel subsidies in the course of three months, Alaoui explained.

The measure helped the government offset the compounding effect of rising hydrocarbon prices on goods, allowing inflation rates to remain largely under control, the minister pointed out.

“The government is on high alert in regards to the rising hydrocarbon prices and is managing the crisis in a sound manner. However, we cannot provide full-scale subsidies, as it is outside the reach of the state budget,” the minister concluded.

While hydrocarbon prices started to rise as a result of the uneven COVID-19 recovery and the subsequent limited supply, the Ukraine war and the ensuing sanctions imposed on Russia, a global gas supplier, have further aggravated the trend.