Pemex defends new wholesale fuel discount plan

Rolling out state-owned Pemex's new discount program this year for its posted wholesale prices for gasoline and diesel has been one of the company's biggest recent challenges, downstream head Carlos Murrieta said.

"You cannot imagine everything that had to happen for us to roll out discounts," Murrieta said today at an event to launch Pemex's new fuel additive, Aditec. Pemex "is not a normal company, but a state-run enterprise with special regulations."

The discounts now vary by region, volume, contract length and "are super transparent," Murrieta said. "If you share your discount with other fuel owners I am confident they will be the same under similar conditions."

Murrieta said competitors and even politicians have long accused Pemex of giving special treatment to some clients, or to subsidize fuel prices with its discounts.

"There is no way we are doing that," Pemex's downstream director said. "Actually 2017 and now 2018 will be the first two years in which we [Pemex's downstream unit] report a positive financial result before taxes. That would not be possible if we were discounting prices at our own expense."

The discount program is one way that Pemex said it will compete with new suppliers of refined product, who were allowed to enter the market in 2016. Pemex continues to supply most of the country's refined products, although independent imports have grown.

Pemex today also introduced its new fuel additive Aditec as another way to compete with international brands.

The additive will be blended in fuels Pemex sells to its franchisees and to other brands using its gasoline, the company said at its splashy product launch in Queretaro, Mexico, featuring lights, video and Mexican Formula One racer Sergio Perez.

The product will be blended in Pemex's 76 distribution terminals as well as at import points, which will give the company an edge against other brands that blend at their retail stations, Pemex's marketing deputy director of transportation fuels Blanca Coelo said.

"We are above our competitors in the quality of this additive," Coelo told Pemex franchise owners at the event. "This is because we will have an homogeneous mix that will occur in all our terminals and import points."

The additive was developed by Mexican scientists with the country's energy research and development center, Mexican institute of petroleum (IMP) and will be produced locally, Pemex told Argus. Gasoline blended with this additive will be rolled out before the end of this month.

Aditec includes seven chemical agents: a detergent and a co-detergent to clean injectors and valves; a liquid that aims to enhance the flux of the fuel in the engine; an anti-corrosion agent; an anti-oxidant; a solvent to maintain gasoline mix accurate at different temperatures; and a demulsifier to avoid emulsion with water.

Pemex is facing increasing competition in the fuel retail sector for the first time after a seven-decade monopoly, as a result of the 2014 energy reform that allowed new brands to enter.

"Pemex is the one that can help enhance your fuel retail business," Pemex downstream head Carlos Murrieta said at the event. "If we do something wrong, if we have not delivered on something we promised — tell us, help us, correct us."