Skip to main content

Calls rise to reactivate Morocco’s only refinery as oil prices soar

Activists and opposition parties are calling for Morocco’s SAMIR oil plant to be brought back online after a seven-year hiatus to alleviate fossil fuel import pressure and enhance energy sovereignty.
Morocco refinery

Morocco currently imports 90% of its energy, and rising fossil fuel prices are increasing the calls to reopen the kingdom’s sole oil refinery.

The Société Anonyme Marocaine de l’Industrie du Raffinage (SAMIR) opened in 1959 as a joint venture between the Moroccan state and Italian energy giant ENI.

In 1997, the plant was privatized, with majority control going to the Saudi-Swedish owned Corral Petroleum Holdings. The refinery ceased operation in 2015 due to financial difficulties. SAMIR occupies 300 hectares on the shores of the Atlantic Ocean, a few miles north of Casablanca, and can refine up to 10 million tons annually.

“The privatization of the refinery was a mistake,” said the president of the National Front to Safeguard the Moroccan Petrol Refinery (FNSRMP), El Houssine El Yamani. The organization’s aim is to reactivate the plant, to positively affect fossil energy prices.

El Yamani, who is also the Secretary-General of the National Union of Oil and Gas, and the representative of SAMIR employees, told Al-Monitor, “We put pressure on decision-makers in the Moroccan state to save the refinery.”

In the first quarter of 2022, fossil energy imports accounted for 17% of total imports in the country. The value of this share is expected to rise due to the war in Ukraine, and western sanctions targeting the Russian economy, particularly its energy sector.

Fatima Tamni, an MP from L’Alliance de la Federation de Gauche at the House of Representatives, told Al-Monitor, “High energy prices combined with inflation negatively affect the purchasing power of Moroccan citizens. Thus, it threatens social stability, as a large portion of Moroccans cannot make ends meet.” She added, “The government has to take measures to enhance national energy security.”

“Energy sovereignty is an illusion," Rachid Aourraz, economist and non-resident scholar at the Middle East Institute, told Al-Monitor. "The only energy-sovereign nations are the fossil-fuel-producing nations, while other countries are vulnerable to global market fluctuations.”

During a plenary session at the House of Representatives, Laila Benali, Minister of Energy Transition and Sustainable Development, said that reactivating the plant would not solve the issue of rising prices. She revealed that when the refinery was in service, the kingdom bought 50% of its refined petroleum needs. Since SAMIR ceased operations, imports are at 100%.

El Yamani disagreed; “When the minister talks about 50% of imports … she meant diesel products. However, SAMIR used to produce the total needs of other products such as petrol, heavy fuel oil, aviation kerosene, and pitch. The reactivation of the plant will put pressure on local energy companies to reduce prices.”

Aourraz added, “Another obstacle is that SAMIR is an old refinery, which requires renovation. This cost will be met by the consumer directly or indirectly.”

The closure of the plant in 2015 was due to heavy financial difficulties and management failure. At the commercial court of Casablanca in 2016, there were calls for the state to take over the plant. “There is no legal, economic, or financial obstacle facing the government to take the initiative and operate the plant,” said El Yamani.

This was disputed by Aourraz, who explained that the plant is owned by foreign capital, making it impossible for the state to run the refinery without purchasing it.

El Yamani responded that 80% of the management company debt, which exceeds the assets, is for the Moroccan state. “There are lobbies inside the government that are benefiting from the fossil fuel liberation process. The reopening of SAMIR will represent a threat to their benefits,” he added.

In December 2015, the Moroccan government, under the leadership of Abdelilah Benkirane, fully deregulated petrol prices. By removing subsidies, the government aimed to support public investments in other sectors, while competition among energy companies was expected to reduce prices.

Tamni argued that this decision created a chaotic energy market. “There is a monopoly in the Moroccan market, as the actors in the energy sector agree among themselves in the absence of free competition.”

El Yamani noted, “The government has to be courageous and encourage local industry, instead of prioritizing imports. This requires the political will to meet the people’s demand to reopen the refinery.”