An Economic Perspective on Mexico's Nascent Deregulation of Retail Petroleum Markets

Lucas Davis, Shaun McRae and Enrique Seira Bejarano

No 24547, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Retail petroleum markets in Mexico are on the cusp of a historic deregulation. For decades, all 11,000 gasoline stations nationwide have carried the brand of the state-owned petroleum company Pemex and sold Pemex gasoline at federally regulated retail prices. This industry structure is changing, however, as part of Mexico's broader energy reforms aimed at increasing private investment. Since April 2016, independent companies can import, transport, store, distribute, and sell gasoline and diesel. In this paper, we provide an economic perspective on Mexico's nascent deregulation. Although in many ways the reforms are unprecedented, we argue that past experiences in other markets give important clues about what to expect, as well as about potential pitfalls. Turning Mexico's retail petroleum sector into a competitive market will not be easy, but the deregulation has enormous potential to increase efficiency and, eventually, to reduce prices.

JEL-codes: L11 L51 Q31 Q48 (search for similar items in EconPapers)
Date: 2018-04
New Economics Papers: this item is included in nep-com, nep-ene and nep-tre
Note: EEE IO
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Published as Lucas W. Davis & Shaun Mcrae & Enrique Seira Bejarano, 2019. "An Economic Perspective on Mexico's Nascent Deregulation of Retail Petroleum Markets," Economics of Energy & Environmental Policy, vol 8(2).

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