Mexico Open Season for Fuel Importers May Begin This Summerby
Fuel distributors must submit bids to use Pemex pipelines
Energy regulator could start taking bids next quarter
Mexico’s energy regulator will begin overseeing bids as soon as next quarter from gasoline distributors looking to import fuel using Petroleos Mexicanos’ existing infrastructure into the previously government-controlled market.
Distributors will soon be allowed to submit bids to use the state-owned oil producer’s infrastructure to transport fuel from the U.S. to Mexico, according to Guillermo Garcia Alcocer, president of the Energy Regulatory Commission, known as CRE.
"We hope that by the next quarter we will be able to authorize the open season," he said Tuesday in an interview at CRE’s offices in Mexico City.
Distributors must use Pemex pipelines to import gasoline into Mexico because it currently has the country’s only available fuel distribution infrastructure, Garcia said. Mexico opened its industry to allow for private service station operators this year for the first time since the 1930s.
"Pemex wants to have certain conditions in the contracts it is going to offer and we have to review that they don’t impose charges to the consumers that are not aligned with international practices," he said.
After the regulator reviews the bids to use Pemex pipelines and the ones with the best terms are approved by the participating companies, the winning distributors will eventually be allowed to import gasoline to service stations throughout the country. While Pemex has been the only company to operate Mexican gas stations for decades, at least five new franchises will operate them by the end of the year, Garcia said.
"The era where Pemex was the only one that could provide this service to consumers has ended," he said.
Mexico has awarded one-year permissions for 96 diesel and 64 gasoline distributors to import a combined 134 billion liters (842 million barrels) of fuel since April 1, far exceeding the more than 150 million barrels of gasoline and 50 million barrels of diesel Pemex imported last year, according to energy ministry data.
The energy regulator estimates that the country’s energy overhaul has generated a total of $156 billion in planned public and private investment in hydrocarbons, natural gas infrastructure and power generation projects since its approval in 2014.
Once distributors begin importing gasoline, they will be able to move fuel into areas where recent shortages have occurred, such as in the northern Chihuahua state, Garcia said.
"There are certain areas of the country with shortages of gasoline, which could be seen as strong signals for future investors in terms of providing incentive for locations to set up new stations," he said. "Contracts will be assigned to the companies that can provide fuel to those locations in the most efficient manner."