Oil companies, including BP, Shell, ExxonMobil, Chevron and others, have sued Morocco over the country’s recent oil price hike, accusing the government of failing to prevent the crisis.
The firms argue that the oil price increase was not a legitimate economic measure and that it has pushed up the countrys oil price by up to 15 percent in just a few months.
Morocco is one of the poorest countries in the world and is often referred to as the “oil-rich country” due to its oil reserves.
The country has struggled with the economic fallout of a devastating oil price collapse last year, when the price of Brent crude oil dropped below $70 per barrel, prompting an international outcry.
Morocco’s economy is in crisis and it has a history of economic mismanagement, including a $20 billion bailout from the International Monetary Fund in 2015.
In September, the government issued a $5 billion loan to the International Energy Agency (IEA) to help stabilize the oil market.
But the loan is set to expire at the end of the month.
The $5bn loan will be used to help refinance existing loans, reduce debt, and develop new financial products, the IEA said.
“Morocco’s oil price has doubled in just five months, making it the world’s third most expensive oil market,” said Ali Al-Dibakhi, executive director of the oil industry watchdog group the Global Oil and Gas Forum.
“The government has failed to prevent a collapse in the prices of all the oil products, including petroleum products, that are now being exported from the country.”
Morocco’s government, which has been in power since 1963, has not been forthcoming about the cause of the price increase, which took effect in January.
On Thursday, the country said it would cut imports of the key oil component, petrochemicals, from the United States and Europe, but said the decision was being reconsidered.
Al-Hussein Abdelnour, a professor at the University of Monmouth College in New Jersey, told Al Jazeera that the price hike is a response to a spike in domestic demand.
“I think the government has made a calculation based on domestic oil production, domestic demand, and its own interests,” Abdelnours said.
The increase in prices comes after a decade of steep declines, which included a sharp drop in oil production and a decline in crude prices to below $60 per barrel in February.
In November, the world was left with a $35 billion oil price crash that sparked a humanitarian crisis.
In December, the United Nations called for a halt to the price increases and announced a $30 billion relief package.
The International Monetary Board has warned that the crisis is likely to become deeper as the country struggles to cope with the influx of refugees and migrants.
“If the international community does not respond, Morocco may experience even more acute shortages and severe economic problems,” Mohamed El-Haddad, the head of the IAEA, said at the time.