Morocco has earmarked MAD 19.4 billion to subsidize butane gas, sugar and soft wheat flour in 2027, as higher international energy prices continue to weigh on public spending.
According to the Compensation Fund report accompanying the 2027 Finance Bill, the government increased its initial 2026 allocation of MAD 13.77 billion by MAD 8 billion, bringing the revised total to MAD 21.77 billion.
The 2027 allocation is 40.9% higher than the initial 2026 budget but 10.9% lower than the revised amount.
Butane gas remains the main driver of subsidy costs. Brent crude averaged $91 per barrel in the first eight months of 2026, up 27.2% from the same period a year earlier, amid Middle East tensions and disruptions to shipping through the Strait of Hormuz.
Butane gas drives up subsidy costs
The state spent around MAD 9 billion subsidizing butane gas between January and August 2026, compared with MAD 8.6 billion during the same period in 2025.
The average state subsidy for a 12-kilogram gas cylinder reached MAD 61.79 during the first eight months of 2026, up from MAD 53.47 a year earlier.
The cost of a cylinder rose from MAD 99 in January to MAD 129 in April, increasing the financial burden on the government as international prices climbed.
Morocco also imported a record 1.49 million tonnes of butane gas in the first half of 2026, including 331,000 tonnes in April alone. The United States remained the country’s main supplier.
Sugar subsidy costs fall
Lower international sugar prices helped ease some of the pressure on subsidy spending.
Raw sugar averaged $352 per tonne, down 16.4% from a year earlier, allowing the state to recover around MAD 700 million through its sugar import mechanism in the first eight months of 2026.
The government continued to subsidize refined sugar at MAD 3.67 per kilogram, at a cost of around MAD 2.7 billion during the same period.
Wheat imports require no subsidies
Morocco did not need to subsidize soft wheat imports between January and August 2026, as import costs remained below the government’s target price.
The country’s grain harvest reached around 90 million quintals during the latest agricultural season, a 109% increase from the previous year.
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