Mexico’s Fuel Markets Post-Election:
5 Key Questions Answered

 

1. Will the pace of energy reform slow with AMLO at the helm?

Based on comments made during and after the campaign, OPIS analysts believe that the new regime will review everything with a fine-toothed comb, which stands to slow down the pace of change.

2. If so, will already-signed deals be reviewed or will the focus be on new initiatives?

OPIS expects that the AMLO administration will start reviewing previous agreements immediately, before the new president takes office.

3. Should we expect price freezes?

AMLO’s future Secretary of the Treasury said government will not freeze the price of fuel, but will continue to control increases by moving the IEPS tax accordingly. The new government is also not expected to eliminate the IEPS tax, since it’s an important source of income for the federal government.

4. How might foreign investment be impacted?

AMLO’s focus on oil exploration and production contracts – combined with his relative silence on fuel markets – suggest that he agrees with the implementation of downstream energy reforms. Third-party investment in storage, pipelines and new retail brands continues in the meantime, as does work at energy-related government agencies.

5. Will Mexico’s demand for refined product imports remain large?

AMLO and his energy secretary have said they want Mexico to stop importing gasoline within three years to decrease the country’s energy dependence on other nations. This entails the renovation of several existing refineries and the construction of at least one new refinery, widely believed planned for the southern states of Campeche, Tabasco or both. There has been less discussion about how Mexico would pay for a multi-billion-dollar greenfield refinery project.


Get all your questions about Mexico’s downstream energy reform answered at the upcoming Mexico Fuel Week, October 22-25, 2018 in Mexico City. This event brings together importers, exporters, jobbers and retailers to gain market intelligence, data and valuable industry contacts to help you navigate the changing cross-border refined products market.

Get details about the event here