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The supply/demand balance in oil…

Two New Gas Companies Break Pemex Monopoly in Mexico

PEMEX gas station

After almost 80 years of being of having the only gas stations in Mexico, Pemex is now facing some competition.

Pemex, Mexico’s state-owned petroleum company, has enjoyed a monopoly on petroleum for the past 8 decades, but its last monopoly—retail gas—has now been broken.

Mexico legislators agreed to open up the country’s energy sector to private, including foreign, firms mid-2014, breaking a 76-year-long monopoly, but Pemex managed to hold onto its gas station monopoly—that is, until now.

Two companies have collectively opened three new gas stations in the country. Hidrosina, a Mexican company, opened a gas station at a former Pemex site in Mexico City this week, and another company, La Gas has opened a stations in Campeche and Merida.

Despite breaking the Pemex monopoly, both companies will sell Pemex gasoline.

Hidrosina has been in business since 1992 and had previously operated around 30 gas stations in the country as a concessionaire under the Pemex brand. Gulf Oil plans to open two gas stations.

Victor Ruiz Iriarte, the operations director of Grupo Hidrosina notes: "With the collaboration of Pemex we signed an agreement to use a different brand and test the success that may or may not work for the clientele." He added: “This is the first test we want to do with 20 stations this year and next year in Mexico City,"

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La Gas is a franchise launched by five companies: Corpo Gas, Group Enerkom, Hidrosina, Lodemo Network and Corporate GES. The company plans to have its stations stand out by featuring things such as clean restrooms, ATMs and customer loyalty plans.

While drivers in Mexico can now patronize non-Pemex stations, the fuel supply to gas stations will not be liberalized until 2017, and until that time, will remain under the control of Pemex.

By Lincoln Brown for Oilprice.com

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