Goodbye Pemex

We would like to say we’ll miss you, but we won’t

If you’re road tripping through Mexico later this year, you might see a few familiar American names, among others, on the gas station signs. The decades-old fuel monopoly that government controlled Pemex had over Mexico is coming to an end.

This is part of the federal government’s energy reforms, which have opened the gas station market that was previously only available to Pemex. The government started allowing companies other than Pemex to sell gasoline last year. Numerous big fuel companies (really, just about every one you can think of) from all across the world have announced their intentions to move in on Pemex’s rapidly shrinking territory.

pemex.JPGBritish Petroleum plans to open 1,500 gas stations in Mexico during the next five years. It opened its first station, reportedly the first in Mexico operated by a multinational company, in March.

Shell and ExxonMobil have both announced their plans to open gas stations here. Neither company said how many stations they plan to open or when we can expect to see them, but ExxonMobil said it will invest $300 million USD in its gas stations during the next decade. Both companies plan on focusing on the markets in central Mexico.

7-Eleven announced that it will spend $21 million to open 30 more gas stations in Mexico this year. These will be operated under the company’s Petro-7 brand. 7-Eleven currently owns 215 gas stations operating under the Pemex brand, although many of these stations are in the process of being converted from Pemex stations.

Valero will be spending $200 million to build three gas storage and distribution facilities for its new stations. And that’s just the first phase; the company has already announced its plans for a second stage of expansion in the northern and southeastern markets. And although the company intends to directly compete with Pemex in the gas station game, it will also offer Pemex the use of the Valero name (for a price, of course).

Mexican firm FullGas is also tossing its hat into the gas station ring; the company announced that it plans to bring the Texaco brand to Mexico later this year. FullGas currently has 50 stations operating under the Pemex name.

Even Costco is getting in the mix. It opened its first gas station in central Mexico in May, selling to both Costco members and the general public. The company invested $3.1 million in the station, which is the first of several that are planned.

Thanks to the now-open fuel market, Mexico’s Energy Secretary said more than $16 billion is expected to be invested in new pipelines and gas stations in Mexico over the next few years. The Energy Regulatory Commission expects the number of gas stations in Mexico to double, from 11,431 to more than 23,000.

Mexico is also eliminating price controls on gas next year, meaning that fuel prices are now set by the market rather than the government. This, along with the increased gas station competition, should lower fuel prices. Well, there’s something to get excited about.

Let bygones be bygones seems to be the feeling, since these companies and more were tossed out of the country when Mexico privatized the oil industry back in the 1930’s, keeping the entire investment these companies had made in Mexico.