Reforms have opened 1,700 gas stations

By Elliot Bullman

Private stations now represent 22% of the total market

Mexico’s gasoline market is diversifying rapidly with new gas stations opening on a daily basis, according to the federal energy secretary Pedro Joaquín Coldwell.

gas station mexico

The increased competition — in a market until recently monopolized by state oil company Pemex — was enabled by legislation stemming from the controversial energy reform in 2013.

After opening the market up to private national and international companies, the next step was to allow the importation of gasoline from abroad, instead of forcing both retail gas stations and other companies to rely on Pemex supplies.

pemex gas station

Consequently, the Energy Secretariat (Sener) has now issued petroleum import licenses to 196 companies and 20 of them have already begun bringing fuel in for their own use.

Beyond the automotive sector, railway and mining companies as well as paper mills have taken advantage of the relaxed regulations.

gas station mexico 2

Petroleum market specialist Rodrigo Favela explained that the energy reform allows private companies to participate at every stage of the supply chain including the refining, transportation, importation and sale of fuel.

He noted that in the northern border region, where tankers can enter easily from the United States, greater competition will likely translate into lower prices sooner than in other parts of the country.

gas station

The entry of new players into the market including BP, Costco and Gulf as well as Mexican companies OXXO Gas and Hidrosina, are indicative of the market’s potential, he said.

According to the Energy Regulatory Commission (CRE), the number of private gas stations in Mexico has risen to 2,578, representing 22% of the 11,700 stations operating across the country.

oxxo gas

Pemex sales exceeded 450 billion (US $23.65) billion pesos in 2016. It remains to be seen what effect increased competition will have on its bottom line for 2017.

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