Mexican President Andres Manuel Lopez Obrador sent a bill to congress Friday that seeks to give state oil company Petroleos Mexicanos greater control over fuel prices, distribution, imports and marketing, his spokesman said.
The proposal would modify the country’s hydrocarbon law to allow the Energy Ministry and main regulator to suspend permits “with the goal of guaranteeing the interests of the nation,” according to a draft seen by Bloomberg News.
It would also let the state oil company, known as Pemex, take control of facilities whose permits had been suspended.
If it passes, the measure would be the biggest reversal yet to hydrocarbon reforms that ended the state’s oil monopoly in 2013 and 2014. Since taking office in 2018, the president has been seeking to dial back on the opening of Mexico’s energy industry to private-sector investments.
The bill was sent to the lower house leadership Friday and will be discussed in the chamber next week, the president’s spokesman Jesus Ramirez said in a phone interview.
The legislation would also allow the state to suspend permits “when an imminent risk to national security, energy security or the national economy is anticipated,” according to the draft.
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The courts have thwarted Lopez Obrador’s previous attempts to reimpose the state’s dominance in the energy market. Earlier this month a judge suspended indefinitely a law that would give state companies priority over private firms in the electricity market.
The president said he would seek to push through a constitutional reform if his efforts were blocked. The attempt to modify the hydrocarbon law comes as AMLO, as the president is known, has increased his nationalist rhetoric and attacks against private companies, with a key midterm election approaching.
The president’s Morena party is trying to retain the control of congress it currently holds in collaboration with smaller parties. While Morena is far ahead in the polls ahead of the June 6 vote, it may well fail to reach the two-thirds super majority needed to change the constitution by itself.
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The arrival of competition has seen Pemex lose significant market share, with foreign companies importing more diesel than the state giant for the first time in June of last year. Pemex has also struggled under its debt burden and long-term production declines.
Spokespeople for the Energy Ministry and Pemex didn’t respond to requests for comment. Senate leader Ricardo Monreal’s office said they had not seen the bill.
— With assistance by Michael O'Boyle, Cyntia Aurora Barrera Diaz, and Amy Stillman
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