Statement from the Competition Council

Following the amendments made to the legal framework governing competition in Morocco, after the entry into force of Law No. 40-21 amending and supplementing Law No. 104-12 on the freedom of prices and competition, and Law No. 41-21 amending and supplementing Law No. 20-13 on the Competition Council and their respective implementing decrees, the General Rapporteur of the Council stated, in his press release of June 2023, that the Competition Council has decided to refer to the investigation the file concerning possible anticompetitive practices in the hydrocarbons market, in accordance with the provisions of Article 38 bis of the aforementioned Law 104.12.

As a result, and following the investigative actions carried out by the competent services of the Council, grievances were notified to nine companies operating in the markets of supply, storage, and distribution of Diesel and Gasoline as well as to their professional organization, in accordance with the provisions of Article 29 of the aforementioned Law No. 104.12. This notification of grievances was the subject of the press release by the General Rapporteur dated August 2023.

Subsequently, the companies concerned and their professional organization expressed their wish to benefit from the provisions provided for in the aforementioned legal framework, notably the transactional procedure provided for in Article 37 of Law No. 104-12 as amended and supplemented.

In response, and in accordance with the provisions of this article (Article 37), the Council’s Board examined and approved the requests for opening discussions submitted by the companies concerned and their professional organization. To this end, the Council’s Board mandated the General Rapporteur to engage in formal discussions with each of the companies concerned and their professional organization, and to submit transaction proposals to them within the limits set for him.

These discussions led to the signing of transaction minutes recording the agreement of these companies and their professional organization on the transaction proposals submitted to them.

Subsequently, and in accordance with the current legislation, the Council convened to rule on the transaction minutes submitted to it and unanimously decided to validate the concluded transaction agreements. These agreements thus put an end to the contentious procedures initiated against these companies and their professional organization, who were notified of this decision on November 23, 2023.

These agreements involve the payment, as a transactional settlement, of a total amount of 1,840,410,426 MAD (one billion, eight hundred forty million, four hundred ten thousand, four hundred twenty-six dirhams) for all the companies concerned and their professional organization, as well as the undertaking of a set of behavioral commitments to improve the competitive functioning of the hydrocarbons market in the future, to prevent risks of harm to competition to the benefit of consumers.

The commitments made within the framework of this transactional procedure are binding, and their implementation will be monitored by the Council’s services. They include the establishment of a competition law compliance program that reflects the commitment of the companies at the highest level of their hierarchy to comply with competition rules.

Moreover, in order to enable the Council to monitor the competitive functioning of the relevant markets, particularly regarding the correlation between the public selling prices of Diesel and Gasoline and the international prices of these refined products, the said commitments provide for the establishment and submission of a detailed report allowing the monitoring of the supply, storage, and distribution activities of Diesel and Gasoline by each company.

This reporting, which will span a period of three years with quarterly information reporting, will include monthly purchases and sales to the stations made by each company, as well as their levels of Diesel and Gasoline stocks.

The companies concerned have also committed to adjusting their prices, as necessary, based on market supply and demand dynamics, the storage constraints, and the commercial policy specific to each company.

These companies will also ensure that their price adjustment system allows independent service stations in their network full autonomy to change public selling prices at their level, immediately, at any time, and without prior approval.

Similarly, the said companies have committed not to in any way link the benefit of rebate or discount programs or any similar program that service stations may benefit from to compliance by the service station with the recommended prices set by the companies.

Furthermore, in order to prevent risks of anticompetitive practices related to the exchange of sensitive information, the commitments made provide for the adoption and implementation of best practices regarding the collection, exchange, or sharing of this information, particularly at the level of managing common storage infrastructures, and joint supply operations in Diesel and Gasoline. Guidelines will be adopted and published by the Council to ensure the conduct of these activities in compliance with the current competition legislation.

Finally, to ensure the effective implementation of the aforementioned commitments, the Competition Council will monitor them in accordance with the current legislation, and for this purpose, periodic evaluation reports will be communicated to it by the companies concerned and their group.

Done in Rabat on November 23, 2023