Liberalization of Hydrocarbon Prices and Developments trend of the

oil Market in Morocco: Economic Study, Time Series

-Case of the Oriental- (Afriquia - Shell)
ESSAIDI Ayoub1 , ETOUZANI Loubna2
a b
DOUAYRI Khadija 3 , LEGSSYER Mohemmed4
c d

1
doctoral student, Mohammed First University Oujda, Morocco
2
doctoral student, Mohammed First University Oujda, Morocco
3
Professor, , Mohammed First University Oujda, Morocco
Professor, , Mohammed First University Oujda, Morocco

ayoub.essaidi01@gmail.com, etouzani-loubna@hotmail.fr

Keywords: Liberalization, Change in hydrocarbon prices, Effect, trend change

Abstract: hydrocarbon market as well as price developments after liberalization, then to analyze
econometrically the effect of liberalization and the trend of hydrocarbon prices (Gasoil, Essence), (from an
economic perspective), using tests and a forecasting model during the period 2000-2021. However, our result
allows us to conclude with respect to the relative significance of an effect of liberalization on the variation of
hydrocarbon prices at the national level.

1 INTRODUCTION system is put in place for the reform of

this system. Following a
First of all, it is a very new subject in decompensation that began gradually
our current concerns, which concerns in 2012, followed by a total
the whole country. liberalization of the hydrocarbon
Since the independence, the Moroccan sector in December 2015, after this
state has decided to set up a date companies continue to set
compensation system on the price of hydrocarbon prices.
liquid hydrocarbons, which is one of
the public mechanisms used to protect
1.1.Problematic
the purchasing power of Moroccan The problem we seek to solve through
consumers. Since its inception, this this study is as follows:
system has aimed to ensure price What is the effect of the liberalization of
stability for basic consumer goods. But hydrocarbon prices (diesel, gasoline) on
the evolution of the world market over the trend evolution of oil market prices in Morocco?
the last fifteen years has demonstrated From this general problem we seek to answer the
the unsustainability and limitations of following specific questions:
this system, where the State country or • What are the main decisions influencing the
Morocco has been forced to inject evolution of product prices Oil?
additional funds to cover the growing • Which parties benefit from indexation and product
costs of this system due to the rise in liberalization Oil?
the prices of raw materials prices. • Does the state control the prices and profit margins
In this regard, the government’s policy generated by the fuel distributors?
of reforming of the compensation
a

b
c

d

1.2. The problem:
The problem we seek to solve through
this study is as follows:
What is the effect of liberalization on
the trend evolution of hydrocarbon
prices in Morocco?
1.3. Answers
From this general problem, will arise
the following questions rise that we
will try to answer (thus should be
deleted):
 Which parties benefit from indexation and
product liberalization Oil?
 Does the state control the prices and profit
margins generated by the fuel distributors?
1.4. hypotheses
To better understand the topic, we
introduce the main hypotheses of the
study:
 Hypothesis 1: Hydrocarbon prices follow
the upward trend of international prices.
 Hypothesis 2: Moroccan consumers have
benefited from the liberalization of
hydrocarbon prices.
2 RESEARCH METHODOLOGY
To answer our problem, we first conducted
a theoretical study followed by an
empirical study, which required:
A bibliographic research that allowed us to
learn about the theoretical aspects and the
work carried out in this direction,
especially those related to the growth and
development of the countries. And for the
realization of our dissertation which
consists in analyzing the evolution of the
price of hydrocarbons in order to clarify
the main events influencing this evolution.
Our methodology consists in combining
the analysis of key figures and statistics
and studies with theoretical analysis and a
descriptive analysis of the evolution before
and after liberalization.
The collection of the data listed in our
work comes from several sources, books,
articles, dissertations, theses and websites,
so to guarantee the reliability of the figures
and statistics we have returned to official
2
documents, more precisely the annual
reports of the compensation funds (CDC)
and those of the High Commission for the
HCP Plan and the reports of international
organizations (BM, OECD)
Regarding the empirical analysis,
we have adopted a quantitative method
based on figures data; namely, the
hydrocarbon prices in the period
(2016-2021) for the stations of the two
companies (AFRIQUIA, SHELL). the
collection of these data is carried out
through field visits for the hydrocarbon
stations and also through annual
reports of HCP of the years (2000-
2015). It is rather an empirical part that
will be discussed with data and key
figures to better analyze our subject.
To this observation, in the first place a
descriptive analysis of the hydrocarbon
prices of the two companies and an
analysis of the main components
(ACP) is conducted, to note the degree
of similarity and homogeneity. Then a
test of a matched sample, to analyze
the degree of the effect of
liberalization on price developments,
through the comparison of the two
averages before and after
liberalization. And finally a time series
to make forecasts through a type of
predictive model.
3 HYDROCARBONS: CONTEXT
The oil or hydrocarbon market has experienced
periods of price fluctuations either up or down that
have shaken enormously and affected the economies
of oil-importing and oil-exporting countries. At the
same time, the hydrocarbon sector has experienced
several periods of disruption, namely the known oil
shocks and counter-shocks of 1973, the Yom Kippur
War, and then in 1979 the Iranian Revolution, these
shocks have profoundly impacted economies
globally because of the economic, political and
health crises, and currently the 2022 Ukrainian war
which has severely impacted the prices of petroleum
products, energy and food. And these fluctuations in
the price of oil are one of the sources of fluctuations
in the world economy: net importing countries suffer
from increases in oil prices while net exporters
benefit, and vice versa in the event of a fall in prices
(Jean Claude Saha, Elhadji Saidou Moussa 2021).
 after liberalization and finally a time
Empirically, the first work done on the changes series on fuel prices with fuel price
in the price of petroleum products and their impact forecasts for years to come. The entire
on growth by Hamilton (2005) in which he states study of the econometric analysis will
that the rise in the prices of petroleum products has a be carried out using the SPSS
significant impact on the growth of a country software.
regardless of an exporting or importing country.
American and British studies researchers Davis and 4.1. Descriptive analysis
Haltiwanger (2001) show the relationship between
the upward variation in oil prices and the price of oil Our descriptive analysis includes the
derivatives, since derivatives prices are directly study of the evolution of monthly fuel
impacted by the rise of the price of oil. For prices (gasoline, diesel) in Morocco
Hamilton (2009), political problems in exporting for three large companies (Afriquia,
countries have a strong impact on the price of oil, for Shell) from 2013 to 2021 through an
example: Iran's nuclear program. SPSS statistical software 
The reflection on compensation remains
interesting for several countries, namely China and Table 2: Statistical price analysis
Brazil. In this regard, economists have carried out (Diesel and Gasoline)
work to measure the effectiveness of subsidies as
well as the impact of their removal. Among these
researchers, Audet et al. (2007) who analyzed the PG SH
effectiveness of food subsidies in Egypt, and Soile 108 108
and Mu (2015) who made an analysis of
hydrocarbon subsidies in Nigeria. This work results
in these subsidies suffering from poor distribution M
and the rich benefit more than the poor. While these e
subsidies do not have a significant impact on
poverty reduction. a

n
Table 1: Summary of research on the subject
M
Impact
Events Shor Long-term e
t-term
d
Liberalization price Economic
uptrend growth and i
development a
Compensation/ Price Purchasing
capping system stability power/Consum n
er welfare M 1qa2.
Economic, social Price Stagnation
o
and political problems uptrend of production
Source: Designed by ourselves d

4 EMPIRICAL ANALYSES
We will study the evolution of
hydrocarbon prices in Morocco before
and after liberalization using the time
series or time series, First, a
descriptive analysis on diesel and
gasoline prices between 2013-2021 in
order to study in the second place the
comparison between prices before and

3
S Sum 1188 981,57 1191

a P 25 8,5000
n p
d 50 9,1650
a

r 75 9,6975
d

d Source: Realization by SPSS software

e According to the results obtained by SPSS, it can
be seen that the average prices for the three
v
companies for diesel and petrol are very close.
i

a
4.2. TEST to a matched sample (Before
and After liberalization):
t

i Table 3 : Correlations for AFRIQUIA

Matched Samples
o

n AFRIQUIA
Gasoil Price
V Before
Liberalization
a & AFRIQUIA
Gasoil Price
r After
i Liberalization
AFRIQUA 0,022
a Essence Price
Before
n Liberalisation
& AFRIQUIA
c Petrol Price
e After
Liberalisation
M Source: Realization by SPSS software
i
For diesel, the correlation between the
n
two groups is not significant since Sig
i = 0.117 while (Sig< 0.05).
m
For gasoline, the correlation between
u the two groups is significant since Sig
m = 0.022 while (Sig< 0.05).
M
The size of the effect: D =
2
a t
x 2
(t + N −1)
i

m In our analysis the square for diesel

equals to 0.42 > 0.14 as well as for
u gasoline the square equals to 0.25 >
m 0.14. therefore, this complementary

4
 analysis suggests that the size of the Y t = a 1t + a 2 t 2 + a 3 t 3 + b. And so
effect of liberalisation on price
developments is very large (large
Y t = 0.030 t - 0.000082t 2 + 8,189
effect).
Table 9: AFRIQUIA Diesel Price
Forecast (2022)
4.3. Series on the evolution of the diesel 2022
and petrol price (2000-2021) D E
 M i ss
ont e e
In this phase we will present h/ s n
graphically the variables, in order to be Ye e ce
able to examine their evolution over ar l
time. 9 1
Jan
, 0,
uar
1 3
y
7 8
9 1
Fe
Table 8: Coefficients AFRIQUIA , 0,
bru
1 3
Diesel Awards ary
6 6
N
9 1
on
Ma , 0,
-
rch 1 3
st
6 5
an
9 1
da
Ap , 0,
rd
ril 1 3
is
5 3
ed
9 1
co Stan
Ma , 0,
ef dard
y 1 3
fi ized
4 2
ci coef
en ficie 9 1
ts Jun , 0,
e 1 3
Standard
3 1
Beta
9 1
Diesel 1,81
Jul , 0,
y 1 2
T ** 2
2 9
1,12
9 1
Au
, 0,
(Const gus
1 2
t
2 8
Petrol 2,14
Se 9 1
pte , 0,
T ** 2
mb 1 2
1,58
er 1 6
9 1
(Const Oct
, 0,
obe
1 2
Source: Realization by SPSS software r
0 5
No 9 1
So we choose the quadratic model, the ve , 0,
mb 0 2
forecasting model for diesel is written er 9 3
as follows: De 9 1
Y t = a 1t + a 2 t 2 + b and therefore Y t ce , 0,
mb 0 2
= 0.038t - 0,000085t 2 + 5,074. er 8 2
Next, the quadratic gasoline prediction Source: Author's work
model is as follows:

5
ANALYSIS OF THE
RESULTS
In this research, a quantitative analysis
was used to study the dimensions and
results of the liberalization of
hydrocarbon prices, and a quantitative
analysis of the future trend evolution
of the oil market in Morocco,
presenting answers to the research
question in the form of an econometric
study of a time series.
We can see from our descriptive
analysis and the analysis of the ACP
main components that after
liberalisation. The prices set by the
companies are very close, which leads
us to admit that there is a kind of
agreement between these companies
with a view to organising the market,
in the sense of a reduction in
competition or even its disappearance.
Oil companies have taken advantage of
liberalization to apply high prices to
increase their profit margins to the
detriment of Moroccan consumers,
including liberalization without a
regulator, as is the case in other
sectors, while the competition council
is inactive. Masmoudi (2018). Nor was
it accompanied by a mechanism that
could have been activated in the event
of significant increases, namely the
price cap system or the activation of
the Competition Council to verify the
competitiveness and transparency on
the part of companies.
From the test of two averages to a
matched sample, we can see the
significant effect of liberalization on
price developments, i.e. prices after
liberalization increased compared to
prices before liberalization. Also, we
note that liberalization is in favor of
the state and distributors, which says
the figures, because the results of
liberalization and from a statistical
point of view have a significant effect
on price variation, this is what actually
translates into the increase in volume
of the import of hydrocarbons on all
diesel.
6
According to the analysis of the forecasts if there is
no control on the part of the state we see that prices
in the coming years will rise.
CONCLUSION
We are at the end of our work on "the evolution and
effect of liberalization" on hydrocarbon prices",
including its temporal delimitation of 2000-2021.
The motivation for choosing this topic was to
provide information on
the phenomenon of instability of hydrocarbon prices.
We used the documentary technique to collect the
data, we also used statistical methods as analysis
tools. Word software enabled word processing,
while Excel and SPSS were used for data analysis.
Our work was divided into two parts, the first of
which concerns the conceptualization and evolution
of the hydrocarbon market. And the second was
devoted to the presentation of data, empirical
analysis and interpretation of results. At the end of
the data collection from the annual reports and the
field visits of the hydrocarbon service stations, the
analysis gives us the following results:
- The presentation and descriptive analysis of the
evolution of gasoline and diesel prices in Morocco
show an upward trend since the liberalization of
diesel. Thus, it was found that the prices of the two
companies (AFRIQUIA, SHELL) are close, which
means that there is a kind of cartel between these
companies (CARTEL).
- The analysis of a time series shows that the prices
of the two future years tend upwards through a
forecast model given by the SPSS software.
If in economic theory it is the confrontation of
supply and demand that determines the variation in
the prices of goods and services, the variation in oil
prices often escapes this rule. The international
hydrocarbon market is exposed to powerful extra-
economic factors that make its fluctuations
unpredictable. These factors include; the weight of
geostrategic relations, internal and international
conflicts, namely wars, economic and political
crises, competition between the great powers. As
well as the principle of compensation which
confirms the theory with regard to the welfare of
consumers and it ensures price stability. As well as
the studies carried out on subsidies that encourage
decompensation because subsidies suffer from
limitations with regard to targeting.
Liberalization without a regulator is not
accompanied by a mechanism that reacts in the
event of significant increases in international prices,
the permanent rise in hydrocarbon prices set by
distributors that generate significant profit margins
since liberalization. Indeed, it is first necessary to
control and very well analyze the structure of the
price set by all distributors.
We had proposed too either a return to the subsidy
from a certain price level, or the implementation as
is the case in some countries such as Belgium, that is
to say a price cap inspired by the Belgian model.
The activation of the Competition Council, which
will play an important role in analysing the
transparency of competition within the hydrocarbon
market.
REFERENCES
.
Pierre Couveinhes, EditorialIn Annales des Mines -
Responsibility and environment 2011/4 (No. 64),
Davis S. J. et Haltiwanger J. (2001). “Sectoral Job
Creation and Destruction Responses to Oil Price
Changes”, Journal of Monetary Economics, vol. 48 (3),
pp. 465-512.
Tricou F. (2008), La loi de l’offre et de la demande, une
enquête sur le libéralisme économique, Presses
universitaires du Septentrion, Villeneuve d’Ascq.
Soile, I. et X. Mu (2015), "Who Benefit Most from Fuel
Subsidies? Evidence from Nigeria", Energy Policy, Vol.
87, 314-324.
Audet, M., D. Boccanfuso et P. Makdissi (2007), "Food
Subsidies and Poverty in Egypt: Analysis of Program
Reform Using Stochastic Dominance", Journal of
Development and Economic Policies, Vol. 9, No. 2, 59-79.

Baker, M., & Wurgler, J. (2007). Investor sentiment in the

stock market. Journal of economic perspectives, 21(2),
129-152.

Saha, J. & Moussa, E. (2021). Impact des variations du

prix international du pétrole sur la croissance économique
au Cameroun. Revue Congolaise de Gestion, 31, 111-150. 

Pindyck, R. S., & Rotemberg, J. J. (1988). The excess co-

movement of commodity prices.

THEVARD Benoît : « Classification of hydrocarbons:

Europe in the face of peak oil »

CARNOT Nicolas and HAGEGE Caterine: "the oil

market". Economy and forecasting, 2004/2005, N°166.

FRANCOIS Les caroux and MIGNON Valérie. :

"Determinants of oil prices".
Revue française d'économie Year 2008 Volume 23 Nr 2.

OECD Economic Outlook Nr 76, Oil Price Developments:

Drivers, economic consequences and policy adjustment.
Parliamentary Report on Hydrocarbons 2018.

Annual activity report of the Compensation Fund.

World Bank Annual Report.

Khadija MASMOUDI, «Oil prices: The government

hesitates», Edition N°:5344.

Hamilton J. D. (2003). “What is an Oil Shock ? ”, Journal

of Econometrics, vol. 113 (2), pp. 363-398.

Hamilton J. D. (2005). “Oil and the Macroeconomy”, The

New Palgrave Dictionary of Economics, Edition Steven N.
Ourlauf and Laurence E. Blume.

7
8