Subsidies to Drop to MAD 33bn in 2014

The net amount of subsidies are forecast to drop to 33.6 billion dirhams by the end of 2014, against 42.5 bln MAD in 2013, which is a decline of 21% thanks to the adoption of the partial indexation system for oil products, said, on Friday in Rabat, Head of government Abdelilah Benkirane .
Subsidies expected to drop to 33 bln MAD in 2014 after adoption of partial indexation, Head of Govt.
This figure is also the result of stopping subsidies for premium gasoline and fuel oil No. 2, the gradual reduction of diesel oil subsidy, and the decrease of the price of some subsidized raw materials at international markets, said Benkirane who was chairing the meeting of the subsidy fund board of directors.
Expenses related to subsidies also fell from 55 bln MAD in 2012 to 33 bln MAD in 2014, and forecasts are banking on 23 bln MAD in 2015, he said.
By the end of 2014, the cabinet will start the liberalization of the prices of three oil products (diesel, premium gasoline, fuel) after stopping definitively subsidies for diesel, which will have a positive impact on these products thanks to free competition, he added.
The subsidy fund reform resulted in a drop of 2.9 dirhams in the price of premium gasoline from 12.18 MAD/L in September 2013 to 9.28 MAD/L at January 1, 2015, and a slight increase of 26 cents in the price of diesel (8.15 MAD/L to 8,41 MAD/L), while the price of oil showed a significant decline of 1,188 MAD/t (from 4,670 MAD/t to 3,482 MAD/t), he recalled.
Source: MAP