Planned spending in Mexico’s fuel sector has been held up by permitting delays, but investment will continue in 2021 despite low expectations for a break in the political impasse.
Mexico’s energy regulatory commission (CRE) issued 57 percent fewer retail fuel and storage permits in 2020 compared with 2019.
They were down to 175 from 407, president of fuel retailers’ association Onexpo Roberto Diaz de Leon said during the Argus Mexican Fuel Forum. Onexpo estimates another 400 are awaiting decisions.
Diaz de Leon said: “What we have learned is that neither the state nor the private sector can move forward on their own.”
He said this has slowed the pace of overall spending in the Mexican fuel sector, which opened to private-sector and international investment following the 2014 energy reform. While retail brands have proliferated, greenfield stations and new storage development have lagged expectations.
Complaints from investors that the permit delays — including those for fuel imports — are part of a government effort to favour state-owned companies, which led to a call from US officials earlier this year for fairer treatment.
Mexico now has 12,769 retail fuel stations with over 170 retail fuel brands including domestic and international firms. This is up by 8.5 percent from 11,774 in December 2017, when the first non-Pemex brands started to arrive to the country.
The Mexican fuel storage business expanded in 2020 as storage filled because of declining demand, but this was only for terminals that were already developed because of the permitting delay. Central Mexican Terminal’s (TCM) 400,000 bl fuel storage facility in central Mexico started 2021 with about twice as much fuel capacity as in early 2020, before the COVID-19 pandemic hit, TCM director Celeste Rebora said.
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