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News Article

PEMEX Retail Share Falls 30 Percent in Five Years

By MBN Staff | Wed, 12/30/2020 - 17:02

PEMEX has lost 30.86 percent of the gas stations that operated under its flag five years ago, as the competition that the Energy Reform was intended to bring has provided consumers with alternative brands, prices and service.

According to statistics from Milenio, PEMEX ended 2015 with 11,210 stations under its name. Today, just 7,750 stations of Mexico’s approximately 12,700 stations belong to the PEMEX franchise, with private companies accounting for the other sizeable share. Of PEMEX’s 7,750 stations, 7,705 are operated via third-parties while the others are operated by PEMEX’s Industrial Transformation arm, Milenio reports.

There are now 160 gas station brands operating in Mexico, says ONEXPO President Roberto Díaz de Leon. Among them are major foreign retailers like Shell, BP and Repsol that were quick to make their presence felt. In March last year, BP announced it operated 450 stations in the country, while at the beginning of 2020 Shell operated 200 stations. Repsol has over 200 stations in operation today.

But national chains have also flourished since stations were permitted to operate under alternative brands. Some, like G500 – a Mexican group backed by Swiss multinational Glencore – have applied their intimate knowledge of the Mexican consumer to carve out a space in a market where customers were used to just one name. The company now operates 470 stations nationwide.

In September, G500 CEO Luz María Gutiérrez told MBN that “no area in Mexico is the same” and that the group therefore adapts its services to include “both functional and emotional elements” that regional consumers are interested in. “For example, in the north of the country, where baseball is very popular, we offer benefits connected to the local sports teams. In other regions, we have benefits connected to the national soccer team,” she said.

In March last year, PROFECO announced that OXXO, the household convenience store owned by FEMSA, was the second largest operator of gas stations in the country behind PEMEX with 483 stations across the country.

However, private sector growth may be harder to come by in the new year. At the start of December, SENER presented a draft resolution bill that would change permitting rules for the importation of gas into Mexico that private players in the retail sector rely on. The change would likely delay the permitting process and reduce the length of permitting, from 20 years to five years, thereby reducing the likelihood of investment. As reported by MBN, COFECE published a warning against the draft bill, saying that it would reduce competition in the downstream sector.

For there to be competition in this market, it is indispensable that the associated regulation does not obstruct or make it unjustifiably difficult to obtain, use and renew the necessary permits for the importation of these products,” it said.

MBN Staff MBN Staff MBN staff