Page 4 - LatAmOil Week 13 2021

LatAmOil COMMENTARY LatAmOil

Protecting Pemex

AMLO has submitted a bill that would allow government agencies to suspend fuel traders’ licences
in the event of “imminent danger ... for national security, energy security or the national economy”

MEXICAN President Andres Manuel Lopez the national economy and state revenues.”
Obrador appears to be stepping up his campaign The legislation also gives Pemex, the national
WHAT: to secure state control over the energy industry. oil company (NOC), the power to assume con-
The president wants the On March 26, the president sent a bill to trol of facilities with suspended permits. Thus
government to have the Congress that provides for giving the govern- far, it is not clear what form this control might
power to suspend fuel ment the right to suspend permits granted to take. The presidential administration has not
traders’ licences under traders in refined fuels under certain conditions. said exactly what Pemex would (and would not)
certain circumstances. According to one section of the draft legislation be authorised to do if it took the reins of a com-
cited by major news agencies, the Energy Regu- pany with a suspended permit.
WHY: latory Commission (CRE) or the Secretariat of Whatever the case, the new legislation is cer-
The draft legislation is in Energy (SENER) may inactivate permits tempo- tain to unnerve the foreign and privately owned
line with the president’s rarily “when an imminent danger is foreseen for companies that have gained access to Mexico’s
overall preference for national security, energy security or the national fuel market since 2013-2014, when former Pres-
letting state-run entities
dominate the energy economy” or when petroleum product import- ident Enrique Peña Nieto secured passage for a
sector. ers are found to be handling contraband. package of far-ranging energy reforms.
The bill does not provide a full explanation
WHAT NEXT: of what other circumstances might qualify as Policy stance
More populist policy “imminent danger”, and the president has not This reform initiative was designed to loosen
initiatives may be spoken publicly about what might necessitate Pemex’s long-standing monopoly on upstream
forthcoming in the run-up the suspension of permits. However, it asserts and downstream operations in Mexico’s oil and
to midterm elections in that a stricter policy is necessary in order to gas industry, and it has enjoyed a certain amount
June. “combat corruption, ensure supply, and protect of success.

P4 www. NEWSBASE .com Week 13 01•April•2021