Mexico eases fuel permit rules for minor changes

Mexico's energy regulatory commission will allow retail fuel station owners to make minor changes to permits without approval from the body's top regulators, in a reversal from a policy that tightened requirements a year ago.

"It was a bottleneck," commissioner Guillermo Pineda Bernal told retailers at the Onexpo fuel retail convention in Merida, Mexico, on 15 June. "We had to do something to straighten it out."

The CRE's hydrocarbons unit — as well as its electricity unit for power-related permits — can again approve certain changes without getting permission from the board, according to a notice published in the official gazette to take effect on 16 June.

Rules put into place in June 2021 — order A/019/2021 — meant that CRE's top body faced thousands of applications for permit changes for issues as minor as the change of address of a permit holder.

The CRE is also committed to clearing out its backlog of these and other fuel-sector related permit applications by the end of the year, Pineda said.

He declined to specify the number of applications that have been in process for an extended time, which regulators have attributed to Covid-19-related issues and budget constraints. But Pineda noted that "it is a lot," in comments to Argus on the sidelines.

Delays also began to build after Mexican president Andres Manuel Lopez Obrador called on regulators to help support state-owned Pemex in 2020.

Pineda noted that any applications for entirely new private-sector fuel storage terminals "will be very difficult to get," Pineda said. Mexico's government has recently stopped operations at several non-state-owned terminals because of regulatory lapses which terminals owners have said are minor.

Delays in permitting for new stations or changes at existing ones have been among complaints that retailers say continue to constrain Mexico's density of retail fuel station to less than a third of that in the US. Mexico has one station for almost every 10,0000 residents, or about 12,400 in total, according to government data.

The number of retail fuel stations has grown by 3pc annually over the past six year, but stations per habitant — taking population growth into account — has only grown by 2pc over the same period, Mexico's watchdog for anti-competitive behavior (Cofece) said at the same event.

"As authorities we are looking for more stations that give better services, and this is not happening in a lot of markets," Cofece's head of planning Jose Nery Perez said at the same convention. Cofece during a regular presidential press conference on Mondays calls out retailers for the highest and lowest prices and any anti-competitive behavior.

But retailers have complained of aggressive inspections and regulatory overreach.

Mexico in 2021 seized 791 tank trucks the government found were involved in fuel theft or other regulatory violations and 145mn liters (35mn USG) of different types of fuels, Cofece said.

Yet regulators, including Mexico's environmental and workplace safety agency (ASEA), told retailers that a rigorous regulatory environment is necessary to ensure safety and protect consumers.

"Everyone here has probably had an inspection," ASEA's head of regulatory issues Julio Camelo told the gathering of retailers. "And if you haven't, you are probably afraid of having one."

By Maria Eugenia Garcia and Carla Bass