Mexico: Regulator might ‘fix’ LP gas prices

Mexico’s Energy Secretary, Pedro Joaquín Coldwell, has stated that, in the event that the competition authority (Comisión Federal de Competencia Económica, COFECE) determines that conditions for a free market for liquefied petroleum gas (LP) are not present, it could be the government itself who imposes maximum prices.

“It is the only case provided by law. It would be enabled for the Energy Regulatory Commission (Comisión Reguladora de Energía, CRE) to set a maximum price. But it is an act that must be preceded by a declaration by the COFECE, that has to be born of a procedure ”

 The Federal Law of Economic Competition determines that, in the terms set by Article 28 of the Constitution, for the imposition of maximum prices on goods and services that are necessary for popular consumption, it is exclusively up to the Federal Executive to determine which goods and services may be subject to maximum fixed prices, as long as there are no conditions for effective competition. It will be COFECE who will determine whether these conditions exist or not.

 Alejandra Palacios, president of the competition authority, explained that LP gas markets are regional, so the determination of prices in the face of a possible lack of effective competition may occur separately across different municipalities or entities around the country.

Full Content: El Economista

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