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Private Gas Stations Are Coming to Mexico

Pemex stations have been one the quintessential signs you crossed into Mexico for decades. There’s simply been no other brand of gasoline visible anywhere in the country. That’s all about to change. In just the past month, the ban has been lifted and private brands of gasoline are allowed to return to the Mexican market.

Private investors can open all new gas stations, or partner in with existing franchisees, many of which are leased directly from Pemex. Pemex has held a total monopoly on the petroleum industry for nearly 80 years, and these changes are only happening at the result of fairly sweeping energy reforms passed by the current administration between 2012 and 2014.

With about 12,000 gas stations in Mexico, it’s a good opportunity and lots of consumers are none to loyal to the Pemex brand. And possibly more interesting still, in June of this year, gasoline vendors will finally be able to import gasoline and diesel fuels.

Keen interest in the Mexican retail gasoline market has come from Femsa, the big Coca Cola bottler that already operates some 13,000 OXXO convenience stores all over the country. They’ve already announced plans to convert some 200 to 300 existing Pemex stations to OXXO branded filling stations.

Some of the more common complaints from Pemex customers are with poor service and over-charging for gas. The Mexican consumer protection agency has launched multiple complaints with franchise owners.

Gulf Oil LP is the first non-Mexican company to announce plans to enter the market and though they aren’t likely to move quickly, their plan calls for some 100 filling stations to open before the end of 2016. Most of these are, again, expected to be re-brandings of existing franchises. New gas stations will face environmental other impact studies before they can open for business.

Pemex is encouraging the development of infrastructure to support supplies to these new filling stations, in the hopes of returning to profitablility. The oil giant has slipped in recent years, not least because of flagging world oil prices. Money for re-investment and upgrades to existing infrastructure has been hard to come by as the oil giant has struggled with mounting debt and pension obligations as well as what is probably an outsized workforce. Narco traffickers also continue to put a dent in Pemex operations with ever more sophisticated methods of siphoning off petroleum from the country’s aging pipeline network.

At the same time, foreign investors sometimes face a byzantine regulatory environment that discourages investment and further deprives Mexican consumers of the service and quality they’re coming to demand. Mexican technical standards are largely in line with those you’ll see in other developing economies, and the vast majority that would be necessary for any serious investment in Mexican petroleum or energy are available in English and suitable download, sharing or bidding for one of the available slots. There’s simply too many opportunities for growth in Mexico to pass them all up.

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