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News Article

Changes to Hydrocarbon Law Suspended Definitely

By Pedro Alcalá | Wed, 06/09/2021 - 09:00

A judge has approved a definitive suspension to all changes to the Hydrocarbon Law which passed both chambers of Congress earlier this year. 

Judge Juan Pablo Gómez Fierro conceded this suspension, thus making the legal proposals null and void of all effects. The suspension was granted as a result of the objections raised by the company Process Fuel. The legal changes were focused on the reform of article 13 of the Hydrocarbons Law, which dictated that PEMEX had to be subject to an asymmetric regulation in the downstream market so that it did not have an unfair advantage over its competitors. The intention of these legal changes was to eliminate this asymmetric regulation and provide additional support to PEMEX. As previously reported, this was considered economically uncompetitive and led to a provisional suspension one month ago, also conceded by Gómez Fierro. Some parts of the legislation also received a definitive suspension afterwards, but this suspension now applies to the entirety of the proposed changes. 

In his resolution, Gómez Fierro ascertained that the elimination of this asymmetric regulation could risk creating a situation in which PEMEX can establish discriminatory pricing policies. The judge also claimed that stopping these changes would not create societal damage or neutralize economic  benefits. On the contrary, Gómez Fierro explained that the suspension would stop these reforms from altering the judicial conditions that allow the downstream sector to develop under free and competitive norms. He added that he expects this decision to promote lower prices and higher quality services for the entire sector.   

Although no federal authorities have yet made a declaration in the matter, it is within the power of the federal government to challenge this decision. While the suspension is legally binding for the time being, its permanent validity depends on a final resolution that must be issued at a future time. In order to reach that point, the suspension must also first be analyzed by a specialized circuit court which will confirm its validity, modify it or revoke it. During this process, the case could make it all the way to the Supreme Court (SCJN). For now, Gómez Fierro announced that any public servant caught ignoring this suspension will be committing a felony punishable by up to nine years of prison time. The CRE will also be forced to publish an official announcement acknowledging the suspension and cancelling the enforcement of the original reform.

The data used in this article was sourced from:  
Photo by:   PEMEX
Pedro Alcalá Pedro Alcalá Journalist and Industry Analyst