Adds details and comments
Mexico has temporarily restricted the import of dozens of petrochemicals and some unfinished refined products that the government says are used as blending components in ways that break or skirt tax and fuel theft laws.
The decree that took effect today places additional controls on the import of products including gasoline, diesel, biodiesel, jet fuel, crude oil, fuel oil, waxes, petroleum coke, chemicals and other products frequently used in blending, such as naphtha.
Companies can still import these products with an additional permit from the energy ministry's undersecretary of hydrocarbons, explaining the amount to be imported and the final use. Firms that already hold such permits for these products can continue to import, but must provide additional information to the undersecretary within 30 days.
The presidential decree published late yesterday said it "does not impede the free trade of finished gasoline and diesel that comply with applicable laws, given that the objective of this measure is to restrict merchandise used in contraband or in the alteration or adulteration of refined products."
According to the decree, the federal government carried out extraordinary inspections at some check points, which showed that only 25pc of the merchandise analyzed corresponded to gasoline and diesel complying with current regulations, while 75pc were other goods whose registered import volume exceeded nearly 40 times the raw material used by the national industry.
Private-sector participants in the energy sector — supported by specialized companies in chemical analysis — have found out that up to 80pc of fuels analyzed were adulterated, the decree noted.
Mexico has long struggled with rampant theft, tax evasion and contraband of refined products.
"With updated calculations based on the demand and growth of the economy and the vehicle fleet, it is estimated that if the problem of the illicit fuel market and gasoline and diesel smuggling is resolved, there would be an increase in tax collection of more than Ps91.4mn ($5.1bn) annually," according to the decree.
Adulterated fuel also poses potential health risks for both consumers and fuel station workers and endangers the environment, the government said in its rationale for the change.
Still digesting
Some private-sector participants in the Mexican energy market said they are still evaluating the consequences of the restriction and it was too early to assess the full impact.
Although the restriction is a "good start" to tackle fuel smuggling and adulteration, it will put pressure and extra costs on companies importing the products and on the energy ministry itself. The ministry will have only 15 business days to answer the import requests, fuel quality lab Ciefsa's chief financial officer Andres Gutierrez told Argus.
