<article><p class="lead">Mexican fuel permit reforms that a <a href="http://direct.argusmedia.com/newsandanalysis/article/2204575">government watchdog</a> said will choke private-sector competition will take effect tomorrow, even as retailers call some requirements unclear.</p><p>Mexico's largest retail fuel association (Onexpo) called for talks with the energy ministry (Sener) and the energy regulatory commission (CRE) as the new law leaves some legal vacuums, based on the final version published in the official gazette today after it passed congress on 22 April.</p><p>The reform requires all holders of fuel market-related permits to comply with an existing minimum fuel-storage policy. But that separate storage policy only applies to traders and distributors.</p><p>"The modifications do not detail which are the obligated parties," Onexpo said.</p><p>Mexico's competition watchdog (Cofece) recommended that congress not pass the reform as it would limit competition and raise prices.</p><p>The <a href="http://direct.argusmedia.com/newsandanalysis/article/2208296">changes</a> allow government regulators to cancel operating permits and even seize infrastructure if a firm does not comply with requirements, including minimum storage thresholds — five days' worth of sales in the case of fuel — or if it represents a threat to national security or violates other laws.</p><p>Other reasons for permit cancellations or seizures include a permit not actively being used or a permit holder participating in fuel theft, according to the reform. The energy ministry and tax authorities will also carry out a review of how oil and petrochemical volumes, including refined products, are measured along the value chain to help combat fuel theft.</p><p>Firms have a 15-day window to mount a defense against any suspension or revocation, which was a key change in the final version of the bill from that originally proposed by the administration of President Andres Manuel Lopez Obrador. Authorities have a further 15 days to determine whether the suspension should stand.</p><p>The change could also indirectly affect upstream companies in Mexico if they plan to sell or export crude or natural gas produced from their blocks as both activities require permits from Sener and CRE.</p><p>If a relevant authority fails to respond to a permit application within 90 days, it will be deemed denied instead of approved as under the previous law.</p><p>A separate change to the hydrocarbons law that weakens rules <a href="http://direct.argusmedia.com/newsandanalysis/article/2211359">meant to limit Pemex's market power</a> has not yet been published in the gazette.</p><p class="bylines"><i>By Sergio Meana</i></p></article>
