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Mexican Watchdog Continues Gas Market Analysis Amidst Presidential Reform Push

 |  February 8, 2024

Despite President Andrés Manuel López Obrador’s recent push to abolish several autonomous agencies, including the Federal Economic Competition Commission (Cofece), the antitrust authority persists in its efforts to analyze the natural gas market and potentially provide recommendations to authorities.

In its recently published report on 2023 activities, Cofece reaffirmed its commitment to scrutinizing the production, distribution, and marketing of natural gas, emphasizing its significance in generating 52% of the nation’s electricity. The agency underscored concerns about the potential ramifications of market inefficiencies, warning of the possibility of increased costs for electricity consumers nationwide and its broader impact on households and industries.

The study initiated by Cofece in 2023, aimed at assessing competition dynamics within the natural gas sector, remains ongoing, with the publication date yet to be determined. This study, the sole initiative launched by Cofece during the year, aligns with the agency’s 2022-2025 priorities and follows previous recommendations made to the López Obrador administration.

Read more: Mexican President Presses On Against Autonomous Regulators

Last year, Cofece informed BNamericas of its plans to delve into the natural gas market as part of its broader strategy. However, the president’s recent submission of a comprehensive reform package to Congress has cast uncertainty over the fate of several autonomous bodies, including Cofece, the Energy Regulatory Commission (CRE), and the National Hydrocarbons Commission (CNH).

The CNH, responsible for overseeing exploration and production activities, and the CRE, which grants permits for electricity generation, storage, and commercialization, are also targeted for dissolution under López Obrador’s proposed reforms.

While the fate of Cofece remains uncertain amidst the president’s reform agenda, the agency’s commitment to analyzing the natural gas market underscores its determination to safeguard competition and consumer interests in Mexico’s energy sector. As debates over the proposed reforms intensify, stakeholders across industries will closely monitor developments, recognizing the potential implications for market dynamics and regulatory oversight in the country.

Source: Banamericas