Mexican courts suspend changes to Pemex asymmetrical regulation

Mexican federal judges have temporarily suspended the application of new legal changes that would end special regulation aimed at limiting the control of NOC Pemex over the country’s downstream segment.

Competition judges Rodrigo de la Peza and Juan Pablo Gómez, who suspended two previous reforms of the electric power law and the hydrocarbons law, agreed to new suspensions on Monday in response to appeals filed by private sector players.

As in previous rulings, Gómez decided to make the suspension general, meaning it applies to every market participant, in an attempt to avoid unfairly benefitting companies that filed appeals over their competitors.

The suspended reform was published in the official gazette on May 19 and states that, as new players have entered the Mexican fuels market, the special regulatory powers originally given to energy commission CRE to oversee Pemex would be removed.

Among others, the original rules, known as asymmetric regulation, state that Pemex cannot strike exclusivity deals for its products with fuel retailers and it must hand over specific information to the CRE, including the discount it provides to different outlets and its sales contracts. They are meant to prevent the NOC from benefitting outlets that carry its brand over those of competitors.

A subsequent publication by CRE that declared void several agreements and resolutions related to asymmetric regulation was also suspended.

The suspensions are a provisional measure meant to preserve the state of the market until a final decision is made by the courts regarding the constitutionality of the new hydrocarbons law. BNamericas has been told by sector experts that the changes to asymmetrical regulation could strengthen the case of companies filing appeals against changes to the law.

The regulatory changes follow on the heels of a broader reform of the same hydrocarbons law passed last month that introduced changes that expand the power of the CRE and energy ministry Sener to review, suspend and cancel midstream and downstream permits. 

Together with another overhaul of Mexico’s national electricity law, the reforms were fast-tracked through congress in a bid by the government to bolster public power utility CFE and Pemex through sweeping changes to energy sector regulation.