• REVERSE: Mexico’s energy regulatory commission (CRE) allowed Pemex -the state-owned oil company and dominant player in the market- to set prices for gasoline and diesel it sells to private fuel wholesalers reversing a 2018 measure to foster a free market.
• COMPETITION: Despite it’s much larger storage and transportation capacity, the CRE overturned Tuesday a 2018 measure that prevented Pemex to arbitrarily set prices to wholesalers; the original regulation prevented Pemex to set prices until private companies reached 30% of market share.
• NUMBERS: Just before Mexico’s major legal reform to the energy, Pemex had 100% share of the gasoline market. In 2019, Pemex recorded having a 91.2% market share while private companies jointly have 8.8% , according to government figures.
• RISKS: “(This) implies risks that Pemex may grant anti-competitive discounts, that it sells (gasoline) below cost and that loses money for this, that it makes impossible for private parties to compete if (Pemex) sells below their average cost”, said Alejandra Palacios, head of Mexico’s antitrust agency (COFECE)
