Morocco To Progressively Remove Tariffs On Petroleum Products

VOL. XLV

No 27

8-July-2002

MOROCCO

Morocco To Progressively Remove Tariffs On Petroleum Products

The Moroccan Government has announced its intention to gradually remove tariffs on imported petroleum products as part of the program of trade and internal market reforms agreed with the European Union. The tariffs on imported petroleum products will be cut by 10% annually over six years with the aim of boosting downstream investment in the domestic distribution and retail sector. “By 2007, Morocco’s oil sector will be fully liberalized…this is a state commitment which will be implemented from this month,” General Affairs Minister Ahmad Lahimi said on 2 July. Tariffs on imported petroleum products were introduced in 1997 to protect the country’s then state-owned oil refiner Societe Anonyme Marocaine de L’Industrie du Raffinage (Samir) which was in the process of privatization. Samir, along with its subsidiary Societe Cherifienne des Petroles, was acquired by the Sweden-registered private Saudi Corral Petroleum Holdings that year (MEES, 12 May 1997).

Samir Refinery Upgrade

In agreeing a reduction of tariffs, the government rejected a request by Samir that the liberalization be delayed by three years to allow it to upgrade its refineries. In April, Samir prequalified companies bidding for a $720mn refinery upgrade package for the 120,000 b/d Mohammedia refinery (MEES, 29 April). The upgrade project will install eight new refining units including a vacuum distillation unit, hydrocracking unit and hydrogen and sulfur production unit that will allow the production of a European specification low-sulfur product slate. According to Foster Wheeler, which won the front end engineering and design (FEED), feasibility study and project management contracts for the upgrade, the project will increase gasoline output by 50%, diesel by 100% and reduce fuel oil production by over one third. The upgrade work is scheduled to be complete by 2004 (MEES, 1 April). The refinery upgrade aims to meet the distillate requirement of the Moroccan market by 2010.