Mexico’s Energy Regulatory Commission (CRE) published modifications to the country’s fuel quality standard, NOM-016-CRE-2016, on June 26, 2017, stoking an ongoing kerfuffle among parties on either side of the ethanol-as-fuel debate. Beyond the philosophical grandstanding, the changes to the reg have potential to impact the evolution of the fuel industry in Mexico and as is often the case, they are generating no small amount of confusion.
Over the past 10 years, national oil company Petróleos Mexicanos (Pemex) has repeatedly announced its intention to introduce gasoline containing ethanol into the Mexican market, only to suspend the effort for one reason or another each time, most recently in 2015. The standard permitting up to 5.8% ethanol as an oxygenate in gasoline has been on the books since August 2016, yet as best we can determine, gasoline currently sold in Mexico is oxygenated with MTBE rather than ethanol. The recent modifications to the fuel standard include an increase in the maximum allowable percentage of ethanol in gasoline from 5.8% to 10%, clearing the way for the introduction of so-called E10 fuel. The move comes within the context of Mexico’s energy industry reform, which allows for private production, importation and sale of fuels as well as the elimination of government establishment of fuel prices. The elimination of gas price controls at the pump is currently being implemented by region, to culminate in nationwide free market pricing as of January 1, 2018. Continue reading Changes to ethanol NOM prompt fuel market debate→
One morning not long ago we were on our way to work at the Mexico Business Blog Global Campus when we strolled by the Pemex station and immediately did a cartoon double-take: The Pemex gas station was no longer Pemex! It was still a gas station, yes, but the grungy, dinged up Pemex livery had now been replaced by sparkling new green and yellow Hidrosina logos and signs. We could not help but to stop and gawk. All our lives, all gas stations (or petrol stations, if you prefer) in Mexico were Pemex stations. The Pemex station has long ranked among the most recognizable icons of Mexican popular culture – the place where you can fill up your tank, and go to the bathroom if you dare. At that seminal moment, on the corner of Insurgentes and Av. Yucatán, a piece of our childhood died, and we were nearly brought to tears. Those tears, however, would have been tears of joy, since the demise of the Pemex monopoly may be the most thrilling public policy to hit Mexico since, well, maybe since the energy industry was nationalized in 1938. Continue reading The new gas stations are here→
Despite losing ground in its share of the national GDP over the last 20 years, Mexico’s chemical industry continues to produce important products and inputs for a range of other manufacturing sectors in the country. The industry has hit some bumps in the road of late, though, which will have to be dealt with if it is to establish a solid path to growth. The combined annual value of production of chemicals, rubber and plastics dropped by 16% in 2015 over the previous year, according to INEGI data, following a smaller decline the previous year. The sharp drop in chemicals production in 2015 underscores one of the most significant challenges currently facing the industry: Interruptions in the domestic supply of critical raw materials from Pemex. Continue reading Supply chain woes vex Mexican chemical industry→