Canacero urges authorities to resolve energy problem

Mexico's iron and steel industry chamber Canacero has urged the government to take steps to make the energy sector more competitive, saying that high energy costs are hurting the steel industry and the economy in general. According to Canacero director Martha Griselda Alva, the Mexican government should allow more private participation in energy generation while still keeping the system in state hands. Although Mexican legislation allows room for independent power producers, all of the electricity generated has to be sold to state power company CFE. "Opening up the energy sector to private investment will help to complement the state's role at the same time as boosting activity in the economy and domestic demand which will benefit not only the steel sector but all industries," said Alva. The steel industry is the principal consumer of electricity en Mexico, accounting for 10% of the national total. The industry represents 2% of GDP and provides 150,000 direct and 550,000 indirect jobs, according to Canacero. Canacero president Alonso Ancira said last month that power and gas bills represent between 25% and 40% of production costs in the steel sector and that electric power costs had gone up 60%, and those of gas 103% in the last two years.