Mexican Regulator Warns Emergency Decree To Control Gas Prices Is Illegal

An emergency directive published by the federal government that seeks to set a maximum price for liquid propane (LP) gas is illegal, according to Mexico’s antitrust regulator.

The Energy Ministry (Sener) published a document on Tuesday, July 27, directing the Energy Regulatory Commission (CRE) to develop a methodology within three days under which LP gas prices can be fixed for a period of six months. The CRE is scheduled to meet on Thursday afternoon to consider the petition.

But the Federal Economic Competition Commission (Cofece) stated the government’s directive is unlawful because the Hydrocarbons Law (LH) establishes that the market will determine gas prices.

“Specifically, article 82 of the LH mentions that the prices … of LP gas will be determined according to market conditions,” Cofece said in a statement.

The regulator stated that maximum prices should only be set if there is a lack of competition in the market. Setting maximum  prices in a market in which competition does exist could cause shortages, Cofece stated.

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