CRE Initiates 11 Sanction Procedures in Mexico

CRE greenlighted 11 administrative sanction procedures against an equal number of legal entities. In an extraordinary session, the governing body of the commission, under the leadership of Leopoldo Melchi García, unanimously voted to commence 10 sanction procedures related to hydrocarbons and one concerning electricity.

During the session, Commissioner Walter Julián Ángel Jiménez highlighted CRE’s effective market supervision, contrasting with a past in which, in his opinion, the regulatory capacity of the organization had weakened.

"The administrative procedures initiated today by this governing body are part of that regulatory power that was lost in the past … When the current Legal Department took over, only one administrative procedure had been initiated in 2019," stated the commissioner.

In 2017 alone, CRE had initiated 129 sanction procedures in the oil, electricity, liquefied petroleum gas (LPG), and natural gas markets, totaling MX$112.1 million (US$6.1 million). 

At the time, CRE had reported that by January 2018, two permits had been revoked, 12 were under sanction procedures, and the rest were in the process of resolution.

Commissioner Jiménez mentioned that CRE continues to work on reducing regulatory backlog this year. "Today, market surveillance is real and regulators are continually encouraged to fulfill their obligations, just as this governing body is fulfilling its duty and working to reduce the backlog this year, to find the most efficient mechanisms for market regulation," he added. Just in July, CRE decided to sanction 38 companies and individuals in the hydrocarbon sector.

However, according to industry experts, CRE is carrying out unfounded inspections to find inconsistencies, revoke permits and thus cancel operations of companies in the hydrocarbon sector. Around 35 Mexican companies that operate fuel terminals nationwide, most of them holding permits valid until 2040, find themselves on the list to be inspected by CRE officials. These companies face uncertainty as CRE does not disclose details about these inspections, leaving them in a precarious position. José Ángel Vela, an energy sector consultant, notes that companies feel threatened, especially since the regulatory authority often overlooks time allowed to rectify inconsistencies. Instead, CRE opts to close facilities, impacting everyone involved.