Mexico begins purge of unused fuel sales permits

Mexico's energy regulatory commission (CRE) plans to cancel 125 fuel commercialization permits because they have not been used in a year, putting to work a new law that went into force yesterday.

The companies had permits to market either gasoline, diesel, fuel oil or jet fuel, or a combination the products under the same permit, according to a list seen by Argus. Some permits on the list were granted to companies, and other to individuals. None of the names correspond to international companies active in Mexico. The list has permits granted from 2016-September 2019.

The list includes OctanFuel, which was an alliance of retailers in southeastern Mexico formed after the country's energy reform. The brand was one of the earliest fuel retail branding efforts different from former monopoly holder state-owned Pemex. The group has posted no new information on the news section of its website since 2016, and the phone number listed has been disconnected.

Under the recent reforms, the companies will have 15 days after being notified of the planned cancellation to mount a defense. CRE will have another 15 days to evaluate that defense and make a final decision. CRE did not immediately respond to a request for comment.

The government of President Andres Manuel Lopez claimed the new law would help control fuel theft as it was fast-tracked through the legislature in the waning days of the session.

But private companies argue that it will instead deter competition and give Pemex an advantage. The changes could also increase prices for consumers, government competition watchdog Cofece has said.

By Sergio Meana