The new gas station in Hermosillo. The new gas station in Hermosillo.

First Chevron station now open in Sonora

Company plans to open a new station every week in northern states

The  multinational energy firm Chevron opened its first gas station in Mexico on Sunday in Hermosillo, Sonora, adding to the competition in a formerly monopolized market.

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Supplied by state oil company Pemex, Chevron’s fuel is more expensive than that of Pemex stations and up to 60% higher than in the United States.

However, that didn’t deter motorists with long lines of vehicles seen waiting to fill up at the new station on its opening day.

A price comparison by the newspaper El Universal found that Chevron’s prices are slightly above those at Pemex with a liter of premium fuel selling for 17.79 pesos (US $0.99) while a liter of regular fuel costs 15.99 pesos.

The U.S. owned company, which is involved in all stages of oil production, has 22,000 gas stations on six continents including almost 1,500 in Latin America.

Sonora Economy Secretary Jorge Vidal Ahumada said that while Pemex will supply Chevron for its first months of operations, the company will eventually import its own fuel from California.

Before that happens, economist and researcher Luis Huesca Reynoso doesn’t forecast any reduction in prices.

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He said the energy reforms that put an end to the state monopoly in the oil sector are moving slowly and have not yet extended to foreign oil production, meaning that for the time being Chevron will have to continue buying fuel from Pemex.

That means the company is subject to an excise tax (IEPS) and value-added tax (IVA) and prevented from selling below the price floor established by Pemex.

Those taxes make gas in Mexico almost six pesos more expensive per liter than in the United States, Huesca said.

The president of Onexpo, a gas station trade organization, agrees that gas prices are unlikely to come down.

Instead, Luis Horacio Muñoz said that the point of difference offered by Chevron is a fuel additive called Techron.

A Chevron official said the company plans to open a new station every week between now and the end of the year in Sonora, Sinaloa and Baja California.

Chevron is the latest international company to enter a market that was previously closed to all but Pemex. BP opened its first gas station in the country in March while the 7-Eleven convenience store chain is also establishing itself as a petroleum retailer in Mexico and has ambitious plans to expand.

Source: El Universal (sp)

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  • David Nichols

    “Adding to the competition in a formally monopolized market”…
    “Chevrons fuel is more expensive than that of Pemex stations”…
    Two mutually exclusive statements which serve to highlight the fact that there will be no effective competition for Pemex in Mexico…

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