Missing Permits Halt US$7.4 Billion in Service Station Investment

Between the end of 1H21 and 2H22, only 147 service stations have been opened in the country because of a lack of permits from the Energy Regulatory Commission (CRE). 

CRE still has approximately the same number of establishments in the permitting process, of which the halted investment stands at around US$7.45 billion, explained representatives of the National Organization of Petroleum Sellers (ONEXPO).

The number of service stations went from 12, March 2021 to 12,995 in June 2022, which implied an increase of just 1.1 percent, said Jorge Eduardo Mijares, President, ONEXPO, many developments remain paralyzed due to a missing government permit, including businesses were are already built or in a very advanced stage of construction.

This slump is not indefinite, however. "CRE has resumed greater activities and has been releasing permits to us," said the president of the organization that brings together fuel station entrepreneurs from across Mexico. "Businessmen obviously would like to reach a return on their investments, but there are many issues that depend strongly on the authority," he added. Obtaining a permit to open a gas station has become complex in recent years. However, with the new requirements prepared by CRE, this process will become even more difficult, consultants warned.

Private companies must now comply with a trademark registration process at the Mexican Institute of Industrial Property (IMPI), issue a business plan, carry out market studies and provide an investment verification. Isidro Fernández, Director General, IFENERGHI Consultants, explained that there are general administrative provisions being reviewed by the National Commission for Regulatory Improvement, which will likely be published without any modification. 

"The content of these provisions is more regulation on top of the existing regulation and the authorities are preparing these provisions to impose new obligations for the permit application procedures. Right now, it is targeted to sales activities and distribution, as well as storage and transportation,” he said.