Mexico’s energy reforms have brought a major overhaul of the nation’s entire energy sector. Among the myriad changes being implemented, major opportunities have emerged with regards to Mexico’s fuels and liquids market, as well as infrastructure development associated with fuel sales, supply, storage and distribution. Mexico’s fuels market is the fourth largest in the world and has experienced considerable growth in the last several years making it attractive to a wide-range of companies and investors. Growth is driven by transportation, power demand and underpinned by strong population growth.
Last year saw several deregulation milestones met on the path toward a liberalized fuel market, as well as important advances in open seasons aimed at ultimately boosting related infrastructure, both in liquid fuels and natural gas. In what has become a rapidly changing market, a growing list of international companies, traders and Mexican firms have begun to develop projects with an eye to establishing themselves in Mexico’s fuel and liquids business.
This “complex transition” was at the center of three high-level discussion panels hosted by the Institute of the Americas on February 27 in Mexico City and attended by over 90 representatives from industry, government, and academia.
Panelists generally agreed that development of the fuel market was on the right track and that the reform measures had boosted investment in energy infrastructure. The proliferation of new market players (40 brands as of this week) in the fuel retail market and the choices being created for consumers is important.
But, there was less consensus on whether Mexico would soon see a truly competitive fuels market that could fully serve the growing demand in Mexico and its citizens, not to mention what the key next steps should be before the July elections. In an interesting development, several speakers put on the table the need for further energy reform in Mexico. Panelists also argued that government and industry alike must continue to aim for efficiency, continuity, stability and long-term regulatory certainty.