PEMEX Once Again Under Asymmetric Regulation

The Supreme Court (SCJN) has revoked the agreement that prevented CRE from applying asymmetric regulation to PEMEX. The SCJN argued that Congress exceeded its authority and lacked the mandate to define if certain markets have reached an efficient and competitive development, in line with the Constitution. The Supreme Court reiterated CRE’s capacity to regulate first-hand hydrocarbon sales jointly with the supervision to implement and promote development and competitiveness within the industry.

During the previous administration, asymmetric laws were introduced to counterbalance PEMEX's dominant position in the market and provide an opportunity for private operators to enter the sector. However, the 2021 amendment resulted in CRE losing its authority to apply asymmetric regulations to private companies involved in first-hand hydrocarbon sales. This shift in regulations is believed to have favored PEMEX, hindering other market players. 

The elimination of asymmetric measures raised concerns among private companies, who said that this change allowed PEMEX to exert even greater dominance over the hydrocarbon market. In response, companies sought legal remedies, including protective orders, to challenge the effects of the regulatory amendments. In response, the SCJN proposed a constitutional review to the Hydrocarbons Law to level the playing field. According to the SCJN, when the Congress reversed the asymmetric regulation imposed on PEMEX, it limited CRE’s autonomy. CRE clarified that this resolution can still be challenged through an indirect amparo trial.

According to experts, Mexico's recent energy disputes and amparos reflect contradictions with what is established in the Constitution itself. “Giving greater preponderance to state energy companies violates the principles of competition in businesses that are valid and are the cornerstone of any market in the world,” mentioned David Enriquez, Partner, Goodrich, Riquelme y Asociados, at the Mexico Oil and Gas Summit 2023. Experts concur that the fact that these disputes reached the Supreme Court and are being decided there represents the “last line of defense” toward ensuring fair competition and against favoring state companies in detriment of private ones, explains Enriquez.

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