Mexico’s President Seeks Constitutional Changes In The Electric Sector

Mexican President Andres Manuel Lopez Obrador has sought to clamp down on private competition to state-owned companies, saying in October he intends to protect the interests of state oil producer Petroleos Mexicanos and electricity firm Comision Federal de Electricidad (CFE). At the time, he accused foreign companies of ransacking the country.

Andres Manuel Lopez Obrador has presented a constitutional amendment favoring the state-owned power utility over private companies after a similar reform was partially suspended by the courts.

The bill will give 54% of the power market to Comision Federal de Electricidad, which will also absorb the regulator that manages the power grid. In addition, lithium extraction will be limited to the government, except for a few contracts that have already been signed.

“We have to have control of energy prices so that people’s finances aren’t affected and this means strengthening public companies,” Lopez Obrador said at his daily press briefing on Friday, October 1. “The previous policy was to strengthen private companies which had the goal of profit, especially foreign companies which were taking possession of the whole market.”

Changing the constitution is seen as a major blow to the nascent private energy sector after Mexico’s historic 2013-2014 energy opening, which ended more than 75 years of oil nationalism in the country. Since taking power in late 2018, the president has vowed to dial back the reforms of his predecessor and prioritize the country’s embattled state-run companies Petroleos Mexicanos and CFE.

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