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Mexico fuel regs create blending opportunity

28 Jun 2017 18:59 (+01:00 GMT)
Mexico fuel regs create blending opportunity

Mexico City, 28 June (Argus) — Mexico's new fuel regulation aligning standards with the United States and relaxing testing requirements may create opportunities for new blending facilities along the US/Mexico border, says Mexico's largest gasoline supplier association, Onexpo.

"If the numbers make it viable, there will be some traders who will decide to import the base gasoline and the ethanol in order to blend them in Mexican territory," Roberto Diaz de Leon, Onexpo president, told Argus. "We are trying to understand what will be the best practical scheme for infrastructure developers as well as traders in order to take advantage of the opportunity presented by the new regulation."

The CRE published yesterday in Mexico's official register the final version of modifications to the NOM-016 fuel standards regulation, first proposed in August 2016.

The modified regulation allows additives such as ethanol to be blended into gasoline "at any stage in the value chain," CRE told Argus last week. Blending previously had to take place in Mexico, at the closest site possible before its final retail sale.

Companies already developing gasoline infrastructure projects along the border are now likely to request modifications to their existing plans that will allow them to incorporate blending facilities, said Diaz de Leon.

Regular and premium gasoline in most of Mexico can now contain up to 10pc ethanol, up from a previous limit of 5.8pc, which more closely aligns to fuel standards in the US. Ethanol is still not allowed in gasoline in the country's largest cities — Mexico City, Guadalajara and Monterrey — because of pollution concerns.

"We also see a big opportunity, principally in the eastern border area, for traders to import the 10pc ethanol gasoline sold in the US into Mexico, taking advantage of existing infrastructure in the US to supply towns such as Matamoros and Reynosa by fuel tank trailer," said Diaz de Leon.

Different gasoline specifications in California would likely limit the import of US gasoline into border towns in Baja California, however.