The measure was supposed to both finance, in part, the direct household aid program launched on royal instructions and to further attract international donors. But it will not take place. At least, not for a long time.
This is how everyday life Eco Inspirations announced in its edition of Friday May 3 that the government has for the time being renounced the planned increase in the price of butane gas. An initial increase of 10 dirhams was to be made at the beginning of April for a selling price of 50 dirhams per gas cylinder instead of 40 but it was postponed sine die. This, as well as two other increases that were to occur subsequently.
Butane is, by far, the product that receives the most state subsidies. At the end of September 2023, of the 22.2 billion dirhams in compensation costs, 12.7 billion concern butane gas, or 57% of the total, specifies the daily. It turns out that without the subsidy, the gas bottle would cost 108 dirhams.
“The government hesitated, undoubtedly because any increase in the price of gas at the end of a budget-heavy month like Ramadan, and with the approach of Eid Al Adha, would be poorly received by households. The government’s hesitations contrast with the diligence that marked the removal of fuel subsidies ten years ago (in 2014)”, we read.
The objective of the decision was to free up budgetary room for maneuver to finance the allowances paid to the poorest households under the direct aid program. The aim is to ultimately replace subsidies with allocations to target populations.
It remains to be seen how the State will find the financial resources necessary for the direct aid program and what arguments it could put forward to convince international donors, notably the IMF, who condition their credit lines through decompensation.
“Furthermore, at the Ministries of Budget and Finance, officials know that it is especially the urban middle classes A and B+ who consume the most subsidized gas cylinders.“, underlines Eco Inspirations. Not to mention the diversion of butane gas by farmers who use it to operate their machines in irrigated areas.
