Walmart Gas Stations Remain Undeveloped

Walmart's gas station business has not yet come to fruition. Amid discussions regarding PEMEX’s privileged position in the industry, problems in permit processing at CRE, and threats to dismantle CRE altogether, Mexico’s regulatory environment is difficult to navigate while market players lose competitiveness against state-owned companies.

In 2021, Walmart announced its new project, in collaboration with Gazpro, to create gasoline stations in the parking lots of some of its stores, including Bodega Aurrera, Mi Bodega Aurrera, Sam's Club, Walmart Express and Walmart Supercenter.

The service stations would be designed, developed, and operated by Gazpro, supplying gasoline provided by PEMEX. This model follows in the footsteps of companies like OXXO that entered the energy market years ago.

However, as reported by EL CEO, of the 61 stations contemplated, there is no record that any have entered into operation, according to public documents from the Security, Energy and Environment Agency (ASEA), even though CRE authorized 44 of the 66 permits for the start of operations in the majority of the contemplated stations. Furthermore, the last permit was granted last December. The company has not released new information regarding its gas station business plan.

Despite the permits granted by CRE, Mexico’s regulatory environment remains challenging. Last year, CRE rejected 34.3% of the permits requested for various activities in the oil market. Experts have expressed concern about the lack of dialog between CRE and the regulated parties.

Furthermore, López Obrador’s energy policy has focused on bolstering state control over the energy sector, advocating for increased involvement of PEMEX and CFE, leading to measures that reverse earlier energy reforms, including canceling oil tenders and imposing a moratorium on new renewable energy projects, all to emphasize state control.

As a result of these measures, PEMEX has regained control over the fuel sector. The NOC reported that it holds an 82% participation in the fuel market, after dropping to 76% in 2022. It also aims to further boost its market share to 84% before the next administration takes office.

The National Organization of Petroleum Retailers (ONEXPO) has also spoken out about challenges in the gas sector during the current administration, particularly regarding permit generation by CRE. However, this situation shifted after the pandemic. Among the main challenges is ensuring the profitability of gas stations, impacted by rising interest rates and bank commissions, as reported by the organization representing gas stations in Mexico. Further complicating the sector landscape, gas stations are also grappling with fuel theft problems that hinder competitiveness among players.

While ASEA continues to advance in one of its programs for the regularization of gas stations, it commented that challenges persist regarding regulation, notably stemming from a lack of understanding of the 2013 energy reform. Also, many stations were unaware of regulatory changes and remained non-compliant, reflecting a gap in supervision and enforcement.