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Mexico: COFECE makes recommendations as gasoline market prepares to spring open

By  |  December 13, 2016
Mexico: COFECE makes recommendations as gasoline market prepares to spring open

Mexico’s Federal Commission for Economic Competition (COFECE) has released its recommendations regarding the imminent opening of the country’s diesel and gasoline markets. The aim, as stated by the COFECE, is to advise the country’s Energy Regulation Commission (CRE) as the agency elaborates a calendar, which will define the process to be used as the prices of fuels are left to market forces across the country between 2017 and 2018.

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    COFECE’s main point concerns the monopoly model used by PEMEX, which made central decisions regarding production, supply and logistics while also maintaining a single price across the country, thus hiding the costs of transportation. Because of this, an open market is expected to see prices vary greatly depending on the availability or difficulty in supplying, transporting and distributing the fuel.

    COFECE goes on to explain the importance of increasing capacity within the country’s oil refineries, to guarantee access to foreign sources of fuel through imports, to allow third parties to use PEMEX’s current pipeline and storage infrastructure, to develop new logistic alternatives and a wholesale market, as well as making the process of opening a new service station as easy as possible.

    The opening up of prices, COFECE concludes, will have to come first to areas that meet a number of minimum requirements in supply, storage and distribution infrastructure, while areas that retain regulated prices will have to be slotted into the CRE’s calendar while considering the need to build up these conditions.

    Full Content: Transportes y Turismo

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