Mexico introduces fuel price liberalisation
The energy regulator has published the fuel liberalisation timetable that will bring to an end the 79-year fuel distribution monopoly by State company Pemex in Mexico. This is one of the most important stages in the energy reform approved in 2013, which will allow the price of fuel to fluctuate, reflecting market conditions and, in particular, the performance of international oil prices, transport and storage costs, the dollar exchange rate and the commercial policies of each individual company.The liberalisation will begin on 30 March this year in the northern states of Mexico, Baja California and Sonora, chosen because of their proximity to the United States, and because they are the main fuel import centres. In fact, 25% of the country’s entire fuel consumption is concentrated in the border area, because of the high levels of trade with the United States. The liberalisation will gradually extend to the other states, reaching the capital city and central states in November. The liberalisation process will end at the end of December in the states of Campeche, Yucatan and Quintana Roo.There are currently 22,490 petrol stations in Mexico and, as a result of this liberalisation, the number is expected to double in the coming years. The infrastructure currently managed by Pemex, which also includes 17,000 km of pipelines and 89 storage terminals, will be used by private Mexican and international companies which, according to the energy regulator, may invest around 12 billion dollars. The Mexican authorities believe that, as a result of the sector being opened up, the country’s fuel storage capacity will also have to be increased to provide emergency reserves for 10 days by 2021 and 15 days by 2025.