Reforma, Mexico City, November 27, 2022
The energy policies of the so-called 4th Transformation [President Andrés Manuel López Obrador's (aka AMLO's) name for his six-year-long administration] have already scared away an international investor in the fuel sector.
The [Spanish-originated, now worldwide] firm, Total Energies Mexico, announced yesterday that it will leave the country as far as providing gasoline is concerned, due to the new federal regulations in the sector.
Its gas stations operate in 16 states of the country, mainly in the center and south, and together with the stations, they will close their Bonjour self-service stores.
Farid Benyahia, director of RED TotalEnergies Mexico, said in a statement that the closing date will be December 29. He said,
"The gasoline sector has been strongly affected by the new regulations of the current government. It was not possible to continue with the development of our investment in Mexico. (For this reason) the decision was made to stop the supply of fuel and, therefore, also the SHOP FOOD AND SERVICES area to which the Bonjour stores belong."
Last year, the government's Energy Regulatory Commission (CRE) temporarily and for no apparent reason closed various petroleum storage terminals through which fuels are imported, mainly gasoline and diesel. One of the closed terminals was in Tuxpan [in the State of Veracruz, on the Gulf of Mexico], through which gasoline is imported via ships from companies such as Total, Repsol [Spanish-based multinational], and Marathon [U.S. company operating the nation’s largest refining system]. All of these operate service stations in the country.
MV Note: Until 2014, all oil exploration, extraction, processing and sale was controlled by the state-owned company, PEMEX. In August of 2014, an energy reform act was passed by Congress, opening the oil business to private domestic and foreign investors. PEMEX, while continuing to be state-owned, would be required to compete with these new investors for access to new oil supplies and for the sale of the resulting products, such as gasoline.
The current president, López Obrador, has sought to reverse this reform for being "neoliberal", i.e. establishing a competitive, free, globally-open market. He is seeking to return control of oil to PEMEX, thereby regaining state control of the industry in Mexico. Unable to gain a full reversal of the reform, which involved changes to the Constitution, the López Obrador administration is seeking other ways to regain control.
One is by instituting numerous bureaucratic regulations that private businesses must comply with in order to gain permits for their business to operate in Mexico. Called "tramites" in Spanish, these bureaucratic stumbling blocks are a notorious, centuries-old technique used in Mexico to stalemate a governmental procedure and thereby prevent persons or organizations from aquiring rights or powers to which they are supposedly entitled by the Constitution or subsidiary, "secondary" laws.
The National Organization of Petroleum Distributors (Onexpo, [an industry group]), indicated that, as of this past August, the CRE had between 100 and 150 service station projects on hold because they were awaiting some permit or revision. So far this year, fewer than 200 permits have been granted, a figure well below the more than 600 that were granted before the start of the AMLO administration. [In other words, tramites are well at work here.]
According to Onexpo, each service station costs about 25 million pesos [US $1.3 million] to build. Multiplied by the 150 that are pending approval for construction and operation, the investment withheld [from the Mexican economy] amounts to about 3 billion 750 million pesos [US $194 million].