6 February 2014

Morocco: Moroccan MPs Question Subsidy Cuts

Rabat — Mohamed El Ouafa, minister-delegate for general affairs and governance, faced questions from Moroccan legislators on Wednesday (February 5th) about price hikes on fuel products.

The unexpected rise provoked an angry response from trade unions and the public.

The government has decided to stop subsidising petrol and fuel oil from February 1st and progressively lower the amount of subsidies paid out for diesel.

MPs criticised the decision, taken without consulting the legislative body or any other parties concerned. The chairman of the Democratic Workers' Group in the Chamber of Councillors, Mohamed Daidaa, stressed on several occasions that the first person to be affected would be the average citizen, the weakest link in the chain.

MPs warned about the negative effects of the move, which will result in higher prices for consumer goods. That was highlighted by MP Abdesselam Khairate, who warned the government about the risk of public malaise, especially at a time when the social dialogue has ground to a halt.

The government official stuck to his reassurances. In his view, the government has a duty to implement benefit reforms. He explained that the government took a resolute stance, putting an end to the prevarication that has dogged the issue for many years.

"Consultations and dialogue will never bring about reform. It was time to act," he commented.

Where petrol is concerned, he said, 60 per cent of the vehicles affected were in state ownership. As for oil, those affected are 17 companies in Morocco, who should have upgraded their turbines to work on gas many years ago.

Some MPs have warned about the possible consequences of the move on unemployment. But the minister-delegate said that the companies concerned were all turning a profit, and therefore they would not be impacted in economic terms.

"We are not going to continue subsidising big business," he said.

According to the minister- delegate, ending the subsidies will save the state around 5 billion dirhams, which will be used for investment.

El Ouafa said that public transport would not be affected by the measure, since the government has introduced other schemes in parallel to maintain prices.

He also signalled that the prices of other subsidised products, such as sugar, flour and butane gas, would not be subject to price hikes and that would leave the public's purchasing power unaffected.

Many members of the public have criticised the Islamist-led government. Hmida Cherrati, who is employed, was disappointed and pointed out that those who ride scooters, for example, and have very limited purchasing power, would suffer the consequences of the move.

"I use my motorbike to get around on a daily basis. I travel several kilometres a day to get to work. The price rise for petrol will dig into my finances, which are already very tight," he told Magharebia.

Kawter Selham, a mother of two, complained about the rise in fruit and vegetable prices.

"All the prices have gone up. Retailers are blaming it on the rise in petrol prices for transporting goods. This is the umpteenth price hike, and yet wages have stayed the same. It's the public who pay the price for decisions like this," she said.

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