Cofece: Reform to the Hydrocarbons Lawwould Impact Prices

Mexico city. The Federal Economic Competition Commission (Cofece) warned that some terms of the reform to the Hydrocarbons Law may affect competition, which will increase the price of fuel for companies and families.

“If approved, the Initiative would generate legal uncertainty for the participants in the hydrocarbon and oil chain, as well as open spaces for an artificial and unjustified restriction of the supply of their products and services to the detriment of Mexican consumers,” said the antitrust agency.

In a study it indicated that it recognizes the efforts of the federal government to combat the smuggling of hydrocarbons and petroleum products are legitimate, so it does not pronounce on the legal modification to revoke permits as proposed in the reform proposal.

However, for reasons of effects on competition, the Cofece Commission sent an opinion to the Congress of the Union in which it recommends not approving said Initiative under the proposed terms.

This is due to the fact that the current constitutional framework establishes a competition regime in the value chain of hydrocarbons, petroleum products and petrochemicals, within the activities of production, import, transport, storage, distribution and sale to the public.

He explained that for Petroleos Mexicanos (Pemex), other state-owned productive companies and individuals to participate in said activities, they require permits – which must be granted expeditiously and not unduly discriminatory – whose objective is to comply with reasonable requirements related to the security, operational capacity or infrastructure, among others.

“In no case, the permitting regime should restrict access to interested parties who meet the applicable requirements,” he stressed.