CRE Highlights Low-Consumption Service Station Opportunities

Energy regulator CRE highlighted the viability of developing low-consumption gas stations for small towns and zones that are difficult to access. Low-consumption service stations only need two weeks to develop, they do not need as many gas pumps as traditional stations and the storage tanks do not have to be underground, so the required investment is lower. Nevertheless, the safety and operation requirements are the same 

According to Guillermo Pineda Bernal, Commissioner, CRE, Mexico has 1,000 zones where it would be profitable to develop such stations, although CRE does not receive many permit requests for them. Low-consumption stations are already approved by the Safety, Energy and Environment Agency (ASEA). The first example is already operational in a rural town of San Luis Potosi and has proven to be highly profitable thanks to the customer flow in the area.

Forbes reported that despite a tense environment regarding energy policy for private companies, these stations are a great opportunity for strategic investment. Added to a 13 percent increase in fuel prices, this may lead to an excellent return on investment (ROI). Some of the advantages of investing in this type of venture are the longevity of the infrastructure: Despite the need for maintenance, the stations have a long life cycle in comparison to the years needed for an ROI.

Another encouraging development is that CRE has broken its permit approval slump by approving 433 permits by November, the highest number of permits approved over the past five years. It is expected that the approvals will reach 500 by the end of the year. In 2017, the CRE approved 351 permits, in 2018, 416 and 2019, 407. Due to the pandemic, authorizations fell to 175 in 2020 and 114 in 2021. 

Pineda also highlighted that while the environment regarding regulation has changed, CRE stands firm in its commitment to solving its backlog of stalled permits.

According to Jorge Mijares, President, the National Organization of Petroleum Distributors (ONEXPO), some of the changes that the fuel industry is seeing indicate maturity in the industry and the development of a freer market. He also pointed out that while contracts used to be leased for 15 years, they might last only one year in the future, which resembles the US’ free competition model.

The private sector made a great effort this year to push the government to speed up the approval of permits. Another factor for this heightened efficiency is Mexico’s spiraling USMCA dispute. On Dec. 1, 2022, Raquel Buenrostro, Mexico’s Minister of Economy, held a meeting with US Trade Representative Katherine Tai in Washington where they discussed the state of the consultations on Mexico’s energy policy. Buenrostro invited her partners to hold the third round of energy consultations in early January.