Beyond COVID-19: Crisis response or road to recovery?
Crisis response or road to recovery?
On May 19, 2021, the Decree amending the Thirteenth Transitory Provision of the Hydrocarbons Law published in the Federal Official Gazette on August 11, 2014 (the Decree), was published in the Federal Official Gazette.
The Decree nullifies the effects of the authority granted to the Energy Regulatory Commission (CRE) to subject asymmetric regulation principles on the first-hand sales of hydrocarbons, petroleum products or petrochemicals and the commercialization carried out by persons controlled by Petróleos Mexicanos (PEMEX) or its subsidiary companies. On the other hand, the Decree states that the sales made by PEMEX, its productive subsidiary companies, or any legal entity on behalf of the Mexican State, shall be considered as commercialization and subject to the principles of generality and non-discrimination set forth in the Hydrocarbons Law and its regulations.
It is worth noting that, prior to the Decree:
Under the Decree, the legislators considered that such greater participation of economic agents has been achieved and that the efficient and competitive development of the markets has been favored; notwithstanding the fact that the authority with competence to determine that such conditions of competition were achieved is the Federal Economic Competition Commission (COFECE), and it has not made any statement yet.
Please bear in mind that pursuant to the Hydrocarbons Law, the Ministry of Energy (SENER) has the power to instruct—either directly or at the proposal of the National Hydrocarbons Commission and/or the COFECE—State productive companies, their subsidiaries and affiliates to undertake the necessary actions to guarantee that their activities and operations do not hinder competition and the efficient development of the markets, as well as the public policy in energy matters. This same provision requires that SENER's activities be oriented by national interests, such as the country's energy safety, sustainability and market diversification.
The Decree will become effective as of May 20, 2021, and, in addition to establishing that all provisions that oppose those of the Decree are repealed, it grants the CRE a term of 30 calendar days to annul the agreements, general administrative provisions, resolutions and guidelines related to the imposition of asymmetric regulations.
The foregoing may contribute to the consolidation of PEMEX and its subsidiary companies as the dominant players in the hydrocarbons market, to the detriment of the participants of the private sector.
As the global aviation industry looks towards post-pandemic recovery and less turbulent skies, it is the topic of decarbonisation that is increasingly top of everyone’s agenda. There have been a number of eye-catching announcements around the world in recent weeks, from United Airlines announcing its intention to purchase 100 electric aircraft, an increased focus on the use of sustainable aviation fuel (SAF) from several airlines, and Korean Air utilising the green bond markets.
© Norton Rose Fulbright LLP 2021