Sheinbaum defends change of regulatory regime in Mexican energy sector

Mexican President Claudia Sheinbaum said Friday that the independent regulators the government is abolishing were dedicated to attacking publicly owned companies rather than increasing competition.

"The autonomous bodies did not represent what they were supposed to, which was the fight against monopolies," Sheinbaum said during her daily press conference. "They simply attacked the public companies, and at the same time they squandered public resources."

Sheinbaum signed into law controversial constitutional reforms proposed by her predecessor, Andrés Manuel López Obrador, on December 20.

The reforms eliminate independent regulatory authorities including antitrust body Cofece, telecom regulator IFT, hydrocarbons commission CNH and energy market watchdog CRE. 

In the energy sector, the reforms are designed to defend the positions of oil and gas giant Pemex and electricity company CFE, both of which are fully state-owned.

The constitutional amendments passed by Sheinbaum's government grant Pemex and CFE a privileged position in the market.

Analysts have warned that the changes will make it harder for Mexico to attract private sector investment in its energy industry.

However, Sheinbaum has said the regulatory changes will roll back the neoliberal reforms of previous administrations and save the government money.

New regulatory framework

Following the publication of the reforms in the official gazette, congress has under three months to design a new framework in which the energy ministry will assume the regulatory functions of CNH and CRE.

On Thursday, Sheinbaum confirmed that CRE would become "a decentralized body that will be in charge of permits... a secondary law is also coming to guarantee this."

The functions of Cofece and IFT will be assumed by the economy ministry.

"Their main objective was to avoid further concentration of services and production of goods... their essential function was to reduce monopolies, which neither the IFT nor Cofece fulfilled," Sheinbaum said Thursday.

The government will revoke some spectrum awards made by IFT, José Antonio Peña Merino, head of Mexico's digital transformation agency, told the Friday press conference.