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21 February 2019
Following the 2013 constitutional energy amendment, the Mexican energy market became a competitive market that allowed private investment. In addition, the Hydrocarbon Law, which was issued in January 2015, allows third parties which are unrelated to the state-owned enterprise Petroleos Mexicanos (Pemex) to sell gasoline and diesel. In light of these developments, in 2016 the Mexican Federal Economic Competition Commission (COFECE) issued a series of recommendations aimed at fostering competition in the gasoline and diesel markets.(1)
On 1 December 2018 Andrés Manuel López Obrador was sworn in as president. In January 2019 the new government implemented several measures to counter and reduce gasoline and diesel theft, including:
This generated fuel shortages in some of Mexico's main cities, which lasted for several weeks.
To address these issues, the COFECE recently issued a follow-up to its 2016 recommendations, which responds to the new administration's concerns and sets out amended recommendations to increase competition in the gasoline and diesel markets.(2)
The COFECE's follow-up document identifies a number of additional concerns:
In light of the above, the COFECE issued new recommendations for a number of authorities.
Congress should consider modifying the Pemex Law and the Hydrocarbon Law in order to make Pemex Logistica an independent operator of Pemex's storage and transport infrastructure.
Further, Congress should modify Article 83 of the Hydrocarbon Law to require the COFECE to authorise cross-ownership of entities that:
Ministry of Treasury and Public Credit
The Ministry of Treasury and Public Credit should offer incentives to states that promote:
Energy Regulatory Commission
The Energy Regulatory Commission (CRE) should:
The COFECE has recommended the creation of a working group of federal government entities, including:
This group would be tasked with:
Further, the COFECE has recommended that the National Counsel for Regulatory Improvement encourage the issuance of guidelines on the establishment of service stations.
Through these additional recommendations, the COFECE is seeking to further protect and guarantee competition and free access in the gasoline and diesel markets by avoiding or eliminating obstacles posed by the market's regulation and structure. As competition considerations are essential to ensure the market's correct functioning and transition, all authorities to which recommendations have been directed should take them into consideration.
For further information on this topic please contact Lucía Ojeda Cárdenas at SAI Consultores SC by telephone (+52 55 59 85 6618) or email (email@example.com). The SAI Consultores website can be accessed at www.sai.com.mx.
(2) Available here.
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