MEXICO CITY, Oct 14 (Reuters) - The opening of Mexico’s retail gasoline market to private companies has done “enormous” damage to the country by luring hundreds of fuel stations away from the Pemex brand, the state-owned company’s chief executive said on Wednesday.
Prior to a sweeping 2013-2014 energy reform that ended Pemex’s decades-long monopoly, only Pemex-branded gas stations could operate in the country. Since then, more and more stations under a range of private brands, including France’s Total and Britain’s BP, have opened.
Pemex CEO Octavio Romero told lawmakers in congressional testimony the retail opening, aimed in part at bringing competition to the market, had brought no benefit to Mexican motorists and suggested that regulators have undermined the state-run company. [nL1N2H51BJ
“If we look at the energy reform from the point of view of the participation of private companies in the retail sale of fuel in the country, the damage done has been enormous,” said Romero.
The Pemex boss said only around 200 new privately-branded gas stations have been built since the reform.
He noted that Pemex franchisees currently operate some 7,800 stations, down by over 10% compared to last year, while private companies now run more than 3,500, though the vast majority of those were former Pemex franchisees that switched brands.
President Andres Manuel Lopez Obrador, who selected his close confidant Romero to run Pemex, has repeated criticized the reform’s opening to private capital, while instead favoring a government-controlled oil industry.
Romero argued that regulators have sought to shrink Pemex’s position in the retail market.
“They tied Pemex’s hands which impeded its ability to negotiate discounts with its clients in order to favor the private firms,” he said.
Last month, Reuters reported that Lopez Obrador asked energy regulators to help support Pemex by limiting permits that could allow private companies to increase market share, including in the retail gasoline market. (Reporting by David Alire Garcia; Editing by Tom Brown)
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