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Argus Summit: Election worries Mexican LPG industry

17 Jan 2018, 10.52 pm GMT

Argus Summit: Election worries Mexican LPG industry

Houston, 17 January (Argus) — A victory by left-wing Mexican presidential candidate Andres Manuel Lopez Obrador in July's election could be chilling for the growing private-sector LPG market, an industry group leader said today.

"This guy is running for the presidency for the third time. He has more than 15 years of campaigning … everyone knows him because of that," Luis Landeros, president of the LPGas Distributors Association, said today at the Argus Americas LPG Summit in Houston, Texas. "He wants to be like [Venezuela's] Hugo Chavez or [Cuba's] Fidel Castro. We are facing this."

Obrador, founder and leader of the Morena party who has consistently led various polls in the presidential race, has said Mexico should cut its dependence on US imports. Direct LPG imports by independent Mexican companies seeking to find an alternative to state-run incumbent Pemex began in early 2016.

The other candidates support continuing the course of Mexican energy reforms, which last year led to the nationwide liberalization of motor fuel markets in addition to LPG.

"What this guy could do is turn back to fixed prices, and if he does that we will lose a big part of this reform," Landeros said.

David Schultz, a partner in early LPG importer New World Fuel, took a more measured approach to the election, saying the momentum of reforms could be difficult to stop even if the new president opposes them.

"It is really hard to put the egg back in the shell," he said. "If the public is feeling they are getting some benefit out of reform, they are going to like deregulation. If on the other hand they see higher diesel prices because of IEPS taxes or they do not like it because it hits their pocketbook, it might retrench reform."

Others have noted that a president needs legislative support to make changes in the laws that formalized reforms and that Obrador cannot singlehandedly repeal it.

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