Sener Reduces Requirements for Fuel Marketers and Distributors
by Alberto de la Pena, William H. Buckley, Natalia Cosio Ondiviela
Published: December, 2019
Submission: December, 2019
Summary of Public Policy and Prior Amendments
The Minimum Fuels Storage Public Policy (the “Public Policy”) was released by Mexico’s Ministry of Energy (“SENER”) on December 12, 2017. The objective is to improve energy security in Mexico and ensure adequate energy supply and competitive prices, through the establishment of mandatory minimum fuel inventories and reporting obligations. Marketers and distribution permit holders are required to maintain these minimum fuel inventories, which may be used only in case of emergency with prior authorization of the Energy Sector Coordination Council (Consejo de Coordinación del Sector Energético).
The Public Policy establishes two obligations that would have gone into effect in January 2020:
Alternative mechanism to comply with minimum volume of Fuels (Tickets):
The Public Policy provides that permit holders may cover deficiencies in their minimum inventory obligations from other marketers, through contractual commitments (each reflected in a document of title called a “ticket”) to deliver inventory to the permit holder or its assignee of the ticket in case of emergency.
Additional requirements established in 2018:
On November 29, 2018, SENER established a national minimum inventory obligation (rather than per region) that would have gone into effect on January 1, 2020, as follows:
In addition, SENER required that at least 50 percent of the inventories must be in storage terminals that supply the Fuels to tank trucks. The rationale for this measure is to guarantee that service stations that depend on this method of supply may continue to operate in case of an emergency.
December 2019 Amendment
On December 6, 2019, SENER released a substantial amendment to the Public Policy. We summarize some of the provisions:
The minimum inventory days requirement was reduced. The amendment eliminates the gradual increase previously established, and provides a fixed amount of days per substance, as follows:
The new minimum inventory obligation will begin on July 1, 2020.
The Public Policy no longer applies to Nonroad Diesel. Consequently, permit holders dealing with Nonroad Diesel are not subject to a minimum volume nor to the reporting obligations provided in the Public Policy.
Procedure. The amendment includes a more detailed procedure related to the process of monitoring and supervision.
1The classification of Fuels is subject to the specifications of the technical standard NOM-016-SECRE-2016.
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