Regulators, AMLO Agree to Boost State Firms: Chamber
09.28.2020 - NEWS

September 28, 2020 [Argus Media] – Mexican energy regulators and President Andres Manuel Lopez Obrador may boost support for state companies by halting permits to competitors, a move that would forego the need to undo a historic energy reform, a major business association said.

The energy regulatory commission (CRE) and national hydrocarbon commission (CNH) control key permits and other processes needed for private investors to operate. Officials with these regulatory agencies assured the president in a meeting yesterday that they could stop issuing permits to companies other than state-owned oil company Pemex and power company CFE, said Edmundo Rodarte, head of the energy commission of Mexico’s business chamber (Coparmex).

Neither the CRE, CNH nor the energy ministry (Sener) responded to requests for comment on the Coparmex allegations.

Mexico’s ruling Morena party has presented a constitutional reform proposal that would roll back the energy reform and seek to rescind contracts awarded to date. The original changes were intended to draw in billions in foreign investment and turn around decades of declining oil and natural gas production. But Lopez Obrador has vowed to respect existing contracts, and has said that any counter energy reform — if necessary — would not be presented until 2021.

Permits for infrastructure such as fuel storage terminals, pipelines and rebranding retail fuel stations have been mostly stalled for more than a year, Rodarte said. No new retail fuel station permits have been issued since March, according to a CRE database reviewed by Argus.

Coparmex estimates that roughly 64 projects related to refined products worth over Ps200bn ($8.9bn) have pending permit processes.

The permit delays alone already made fuel more expensive for consumers, Mexico’s competitive watchdog Cofece said in July.

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