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News > Mexico

Mexico: Lower House Approves Reforms to the Hydrocarbons Law

  • A guard watches over the entrance to Antonio Amor refinery, Salamanca, Mexico, 2020.

    A guard watches over the entrance to Antonio Amor refinery, Salamanca, Mexico, 2020. | Photo: EFE

Published 15 April 2021
Opinion

Besides fighting the smuggling of oil products, proposals call for suspensions of production permits when there are national and energy security risks.

Mexico's Lower Chamber on Wednesday approved reforms to the Hydrocarbons Law, which include oil production suspensions and the intervention of facilities that sell stolen or contraband fuels.

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The Energy Regulatory Commission (CRE) can revoke permits if producers do not comply with storage capacities determined by the Ministry of Energy.

In a bid to fight the smuggling and overcharge to consumers, the Tax Administration Service must verify protocols regarding the measurement of hydrocarbons, petroleum products, and petrochemicals.

The reform includes suspension on handling, storage, transportation, and distribution of oil products in the event of "imminent risks" to national security, energy security, or the economy.

Opposition lawmakers from the National Action Party (PAN), the Revolutionary Institutional Party (PRI), and Democratic Revolution Party (PRD) rejected the reform, which was approved by 292 votes in favor.

It is the latest policy promoted by President Andres Manuel Lopez Obrador (AMLO) administration to regulate the energy sector, following the Electricity Industry Law reform proposed last month.

The Senate must now debate the bill, which could have several implications for foreign oil companies operating in the country, such as Shell, British Petroleum (BP), Exxon, and Total.

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