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Mexico ruling does not ban E10 imports: Onexpo

19 Oct 2017, 5.46 pm GMT

Mexico ruling does not ban E10 imports: Onexpo

Houston, 19 October (Argus) — Outside companies can still import gasoline blended with up to 10pc ethanol for sale in most of Mexico despite a judge's recent decision, the head of a retail fuel association said today.

A judge on 9 October ruled against increasing the amount of ethanol allowed in most of the country to 10pc from the previous 5.8pc, siding with plaintiffs who argued that using ethanol would cause environmental damage. Onexpo head Jose Carlos Femat said that further analysis of the decision showed that it is directed at the national oil company only.

"The judge's order only applies to Pemex," Femat told Argus at the Argus Mexican Refined Products Markets conference in Houston, Texas, this week. "There has been some confusion on this point, and we want to communicate this to the market."

Mexico deputy secretary of energy for hydrocarbons Aldo Flores Quiroga highlighted at the same conference yesterday that ethanol will still be allowed up to 10pc outside the most populous cities of Mexico City, Guadalajara and Monterrey.

The country's energy regulatory commission (CRE) has said that it will appeal the judge's decision.

Mexico mostly uses MTBE as a blending component, and was the US' biggest importer of MTBE in 2016 with an average of 24,000 b/d.

The distinction on the ruling will have little immediate impact, as Pemex continues to supply practically all of the country's approximately 12,000 retail fuel stations. But Mexico is in the process of trying to attract more outside importers as it liberalizes its fuel market. Independent gasoline imports in August were still limited, at 12,000 bl, or 387 b/d, according to Mexico's tax office data.

"You can import E10 directly from the US refineries without having to create a special blend," Femat said.

But he added that "Onexpo is not for or against ethanol. We have held workshops for our members on both ethanol and MTBE. We are learning about the markets."

MTBE exporters will be watching the case closely. LyondellBasell provides MTBE to Mexico, and associate director David Dennison said at the same conference today that they expect the country to remain a growth market, noting the same court case.

"There are a lot of questions and concerns in Mexico about using ethanol," he said.

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