Pemex in Houston

Oil companies have always found it profitable to seek vertical integration, from exploration and production to sales to final consumers through refining, and market diversification. Many people wonder why Pemex has to open gas stations in the United States. The idea persists among some that a state enterprise should have a monopoly in the domestic market and conduct only within their country. This is an attitude that claims to be progressive but simply reveals ignorance of the oil market. Indeed, oil companies have always found it convenient to look for a vertical integration, from exploration and production to sales to final consumers through refining, and market diversification. Vertical integration and diversification reduce risks in an industry that has suffered enormous price fluctuations and conditions due to the constant interventions and manipulations of governments. The strategy share virtually all major oil companies in the world, from Exxon Mobil and Shell to Gazprom and PDVSA. Venezuela’s PDVSA, despite being controlled by a populist government, has plants refining and a chain of gas stations in the United States which operate under the name of Citgo. It does not agree by ideology but as a strategy to strengthen in the long run. Pemex had not done this for political bias. The decision to establish gas stations in the United States today, as it was taken years ago to have a refinery in Texas; it behooves us to the shareholders, who are Mexican citizens.

The opening of the first Pemex gas station in Houston, however, has revealed the enormous gulf between the US and Mexican market. In its first day of trading he offered regular unleaded gasoline at $ 1.54 per gallon with cash. This means a price of 6.90 pesos per liter at the exchange rate of bank branches (16.95) last Friday. You compare the price of 13.57 pesos per liter we charge gas stations in Mexico for Pemex Magna gasoline inferior to that sold in the United States. The fault, of course, is not Pemex. In Mexico the price of gasoline is established by decree the Ministry of Finance. Far from fluctuate daily, and in the American Union, or to vary from place to place to consider transport costs, the price in Mexico has remained since 1 January this 2015 despite falling prices oil and applies throughout the country except in the northern border where adjusted downward by competition from US stations. The price difference between the US and Mexico are the pockets Finance as one of the hidden taxes charged us Mexicans for the privilege of living in Mexico. The idea that we Mexicans have benefited oil monopoly is false. Today gas prices in Mexico doubled the US, which is an abuse that can only be maintained by retaining the monopoly Pemex in the domestic market. In the past the price in Mexico was lower than the US, but it also generated market distortions and unfair subsidy to owners of motor vehicles, which are the richest group in the country.

The market is always a better mechanism for setting prices of gasoline or any other product that best bureaucrat. The energy reform is opening paths for Pemex to become a more competitive company. But much remains to Mexicans to receive the benefits of a more open market. For now we must pay a price for gasoline extortion: twice what you pay in Houston even though the product it sells the same Mexican company.

Source: MéxicoXport